Propagation and smoothing of shocks in alternative social security systems

• 成果类型: Article
• 署名作者: Auerbach, Alan; Kueng, Lorenz; Lee, Ronald; Yatsynovich, Yury
• 署名单位: University of California System; University of California Berkeley; Northwestern University; Rensselaer Polytechnic Institute
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2018.05.012
• 发表日期: 2018
• 页码: 91-105
• 关键词: Notional defined contribution systems; Pay-as-you-go systems; Generational incidence

摘要

Even with well-developed capital markets, there is no private market mechanism for trading between current and future generations. This generates a potential role for public old-age pension systems to spread economic and demographic shocks among different generations. This paper evaluates how different systems smooth and propagate shocks to productivity, fertility, mortality and migration in a realistic OLG model. We use reductions in the variance of wealth equivalents to measure performance, starting with the existing U.S. system as a unifying framework, in which we vary how much taxes and benefits adjust, and which we then compare to the existing German and Swedish systems. We find that system design and shock type are key factors. The German system and the benefit-adjustment-only U.S. system best smooth productivity shocks, which are by far the most important shocks. Overall, the German system performs best, while the Swedish system, which includes a buffer stock to relax annual budget constraints, performs rather poorly. Focusing on the U.S. system, reliance solely on tax adjustment fares best for mortality and migration shocks, while equal reliance on tax and benefit adjustments is best for fertility shocks. (C) 2018 Elsevier B.V. All rights reserved.