A Worker's Backpack as an Alternative to Payg Pension Systems

• 成果类型: Article
• 署名作者: Diaz-Saavedra, Julian; Marimon, Ramon; de Sousa, Joao Brogueira
• 署名单位: University of Granada; Centre de Recerca en Economia Internacional (CREI); Pompeu Fabra University; Universidade Nova de Lisboa
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvad021
• 发表日期: 2023
• 页码: 1944-1993
• 关键词: social-security; fiscal-policy; retirement; earnings

摘要

Facing an ageing population and historical trends of low employment rates, pay-as-you-go (PAYG) pension systems, currently in place in several European countries, imply very large economic and welfare costs in the coming decades. In an overlapping generations economy with incomplete insurance markets and frictional labour markets, an employment fund, which can be used while unemployed or retired, can enhance production efficiency and social welfare. With an appropriate design, the sustainable Backpack employment fund (BP) can greatly outperform (measured by average social welfare in the economy) existing PAYG systems and also Pareto dominate a full privatization of the pension system, as well as a standard fully funded defined contribution pension system. We show this in a calibrated model of the Spanish economy, by comparing the effect of its ageing transition under these different pension systems and by showing how a front-loaded transition from the PAYG to the BP system can be Pareto improving, while minimizing the cost of the reform.