Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92952
Authors: 
Homburg, Stefan
Year of Publication: 
2014
Series/Report no.: 
Discussion Paper, Wirtschaftswissenschaftliche Fakultät, Leibniz Universität Hannover 523
Abstract: 
Public pension schemes can be designed either as capital reserve systems or as unfunded (or pay-as-you-go) schemes. In the literature it has been alleged that unfunded schemes are intergenerationally efficient in Pareto's sense. Here we show that this holds only if contributions to the system are levied as lump-sum taxes. But in reality, flat-rate income taxes are normally used instead - and then, an unfunded scheme induced distortions and can completely be abolished in finite time without inflicting damage upon any generation.
Subjects: 
Public Pensions
Overlapping Generations
JEL: 
H21
H55
Additional Information: 
This is a postprint of a paper that was published in the Journal of Institutional and Theoretical Economics (JITE), vol. 146, 1990, pp. 640-647.
Document Type: 
Working Paper

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