Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95045
Authors: 
Lindbeck, Assar
Persson, Mats
Year of Publication: 
2000
Series/Report no.: 
IUI Working Paper 535
Abstract: 
This paper presents a unified analytical framework for the analysis of social security reform. It discusses reform along two dimensions: Pay-As-You-Go versus fully funded on the one hand, and actuarial versus non-actuarial on the other. Making the system more actuarial entails a trade-off between less distorted work incentives and intra-generational redistribution. Increasing the degree of funding entails a trade-off between more distorted work incentives, and redistribution in favor of future generations. If a PAYGO system already has strong actuarial elements, the additional welfare gain from making it fully funded derives from the possibility of portfolio diversification.
Subjects: 
Pension reform
social security
funded pensions
work incentives
saving
JEL: 
H55
Document Type: 
Working Paper

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