Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/68845
Authors: 
Kifmann, Mathias
Schindler, Dirk
Year of Publication: 
2000
Series/Report no.: 
Diskussionsbeiträge: Serie 1, Fachbereich Wirtschaftswissenschaften, Universität Konstanz 308
Abstract: 
We analyze the effects of a permanent increase in life expectancy and of a permanent decline in the rate of population growth on intergenerational redistribution in a pay-as-you-go pension system with a constant contribution or constant replacement rate. We show that under these policies both demographic changes increase the implicit tax rate of later-born generations to the pension system. In addition, we characterize policies which smooth the implicit tax rate. To reach this objective, generation-specific contribution or replacement rates are necessary. Partial funding of the pension system is indispensable if the rate of population growth falls. If life expectancy increases, the contribution rate fluctuates and may not converge to a new steady state value unless funded elements are introduced.
Subjects: 
Pay-as-You-Go
implicit tax rate
life expectancy
population growth
JEL: 
H55
J18
Document Type: 
Working Paper

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