Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 535: What Are the Gains from Pension Reform?

Assar Lindbeck () and Mats Persson ()
Additional contact information
Assar Lindbeck: The Research Institute of Industrial Economics, Postal: P.O. Box 5501, SE-114 85 Stockholm
Mats Persson: Institute for International Economic Studies, Postal: Stockholm University, SE-106 91 Stockholm, Sweden

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.

Keywords: Pension reform; social security; funded pensions; work incentives; saving

JEL-codes: H55

28 pages, July 5, 2000

Full text files

iuiwop0535.pdf PDF-file Full text

Download statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2022-09-03 20:59:58.