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Ageing Populations and Intergenerational Risk-sharing in PAYG Pension Schemes

Kruse, Agneta LU (2002) In Working Papers, Department of Economics, Lund University
Abstract
The purpose of this paper is to compare pension schemes with respect to their intergenerational redistributive effects caused by economic and demographic changes. It is shown how these effects depend on the specific design of the pension scheme, with special attention devoted to the indexation problem. There is a potential trade-off between financial stability of the pension system and a “desired” distribution between generations. A buffer fund is often seen as the remedy to demographic strain and potential conflict. Therefore, the possibility of accumulating (and de-cumulating) a buffer fund is included. A lifecycle perspective is applied and the risk-sharing is measured by different generations’ rate of return. The analysis is carried... (More)
The purpose of this paper is to compare pension schemes with respect to their intergenerational redistributive effects caused by economic and demographic changes. It is shown how these effects depend on the specific design of the pension scheme, with special attention devoted to the indexation problem. There is a potential trade-off between financial stability of the pension system and a “desired” distribution between generations. A buffer fund is often seen as the remedy to demographic strain and potential conflict. Therefore, the possibility of accumulating (and de-cumulating) a buffer fund is included. A lifecycle perspective is applied and the risk-sharing is measured by different generations’ rate of return. The analysis is carried out within the framework of an over-lapping generation model in the setting of a stylised economy. (Less)
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author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Notional defined contribution pension systems, dem
in
Working Papers, Department of Economics, Lund University
issue
18
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
c3378e52-e394-4064-8ce9-e7428a9d941c (old id 1387601)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2002_018.htm
date added to LUP
2009-04-20 12:27:26
date last changed
2016-04-16 07:55:03
@misc{c3378e52-e394-4064-8ce9-e7428a9d941c,
  abstract     = {The purpose of this paper is to compare pension schemes with respect to their intergenerational redistributive effects caused by economic and demographic changes. It is shown how these effects depend on the specific design of the pension scheme, with special attention devoted to the indexation problem. There is a potential trade-off between financial stability of the pension system and a “desired” distribution between generations. A buffer fund is often seen as the remedy to demographic strain and potential conflict. Therefore, the possibility of accumulating (and de-cumulating) a buffer fund is included. A lifecycle perspective is applied and the risk-sharing is measured by different generations’ rate of return. The analysis is carried out within the framework of an over-lapping generation model in the setting of a stylised economy.},
  author       = {Kruse, Agneta},
  keyword      = {Notional defined contribution pension systems,dem},
  language     = {eng},
  note         = {Working Paper},
  number       = {18},
  publisher    = {Department of Economics, Lund Universtiy},
  series       = {Working Papers, Department of Economics, Lund University},
  title        = {Ageing Populations and Intergenerational Risk-sharing in PAYG Pension Schemes},
  year         = {2002},
}