Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/56409
Year of Publication: 
2002
Series/Report no.: 
Diskussionsbeiträge No. 100
Publisher: 
Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft, Freiburg i. Br.
Abstract: 
Pay-as-you-go pension programs can help to share risk amongst generations. While a wage-indexed pension program is best suited to share labor income risk, I show that the combination of stochastic labor income and stochastic population growth may reduce the possibilities for intergenerational risk sharing: Labor income risk can only be shared when individuals are also exposed to demographic risk. For demographic uncertainty the usual categorization of pension programs does not suffice. I therefore introduce policies on how the demographic uncertainty is transmitted via social security. An optimal demographic indexation is derived for a small open economy and a closed economy.
Subjects: 
intergenerational risk sharing
social security
demography
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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