This paper shows tha shifting the portfolio allocation of the social security trust fund towards more equity investment, ceteris paribus, reduces the aggregate capital stock as well as the average consumption level of all individuals except the poor retirees who receive an increase but at the...

We investigate the balanced growth effects of pension pland on the rate of growth and on equality in a closed economy where individual decisions about education are the engine of growth. We distinguish between three different benefit rules: a Beveridgean one, a Bismarckian one depending on one's...

We consider a two-period overlapping generations model in which individual voters differ not only according to age but also productivity. In such a setting, a (redistributive) Pay-As-You-Go system is politically sustainable, even when the interest rate is larger than the rate of population growth .

It is generally accepted that moving from an unfunded to a funded social security system implies a welfare loss for the trasition generation, that is the generation that has to pay twice: first, saving for this own retirement and second, contributing to the pensions of the then retired...

A partly heuristic attempt at exploring long-run policies aimed at a second-best compromis between ex ante risk-sharing efficiency and ex post productive efficiency. Wage subsidies for low-skilled workers financed vy taxes on high wages are advocated, together with imposed risk sharing between...

It is well known that, in OLG economies with life-cycle saving and exogenous growth, competitive equilibria will in general fail to achieve optimality and may even be dynamically inefficient. This is a consequence of individuals accumulating amounts of physical capital that differ from the level...

This paper explores the effect of letting individuals choose their retirement age in a world of uncertainty where there exist both defined benefit (DB) and de?ned contribution (DC) pension plans. The paper shows that giving individuals the flexibility to determine when to retire is an important...

Existing political economy models of pensions focus on age and productivity. In this paper we incorporate two additional individual characteristics: sex and marital status. We ignore the role of age, by assuming that people vote at the start of their life, and characterize the preferred rate of...

Although the optimal policy under endogenous fertility has been widely studied, the optimal public intervention under endogenous childbearing age has remained largely unexplored. This paper examines the optimal family policy in a context where the number and the timing of births are chosen by...