Sharing Demographic Risk-Who Is Afraid of the Baby Bust?

• 成果类型: Article
• 署名作者: Ludwig, Alexander; Reiter, Michael
• 署名单位: University of Cologne
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.2.4.83
• 发表日期: 2010
• 页码: 83-118
• 关键词: Optimal taxation; social-security; MODEL; population; EFFICIENCY; lifetime; welfare; REFORM

摘要

We model the reaction of a PAYG pension system to demographic shocks. We compare the ex ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules. The model is calibrated to the German economy. We find that the German systetm comes relatively close to the second-best solution, and that the recent baby-boom/baby-bust cycle leads to welfare losses of about 5 percent of lifetime consumption far some cohorts. We argue that it is crucial for all our results to correctly model the labor market distortions arising from the pension system.