In a number of countries one observes a steady decline in defined benefits pensions schemes,public or private, funded or unfunded, and a simultaneous expansion of defined contributionsplans. One of the consequences of this trend is to deprive individuals at the time of theirretirement from the...

We here consider how Chinese firms adjust to higher minimum wages and how these affect aggregate productivity, exploiting the 2004 minimum-wage reform in China. We find that higher city-level minimum wages reduced the survival probability of firms which were the most exposed to the reform. For...

We consider social insurance schemes with a two-part benefit formula: a flat (constant) term and a variable term which is proportional to individuals' contributions. The factor of proportionality defines the type of social insurance. We adopt a two-stage political economy approach. At the first,...

In this paper, we study the welfare effects of monetary policy in a simple overlapping generation economy in which agents voluntary contribute to a public good. Inflation has two effects at equilibrium: it increases voluntary contributions and it misallocates private consumption across time. We...

We study the optimal design of a social security system when individuals differ in health status and occupation. Health status is private information but is imperfectly correlated with occupation: individuals in harsh occupations are more likely to be in poor health. We explore the desirability...

One of the greatest success stories in our societies is that people are living longer, life expectancy at birth being now above 80 years. Whereas the lengthening of life opens huge opportunities for individuals if extra years are spent in prosperity and good health, it is however often regarded...

This paper analyzes and compares the macroeconomic performance of defined-benefit and defined-contribution pay-as-you-go pension systems when population ages. When the fertility rate decreases or longevity rises, it is shown that a shift from defined benefit (defined total benefit or defined...

In this paper we propose a pension policy that would isolate the social security system from any financial crisis resulting from changes in population structure. This policy consists of linking social security benefits to the fertility behaviour of the individual. We present a theoretical...

Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez-faire or in a first-best setting, there would be no such trend. However, when first-best instruments are not available, because health and productivity are not...

This paper studies the design of a pay-as-you-go social security system in a society where fertility is in part stochastic and in part determined through capital investment. If parents' investments in children are publicly observable, pension benefits must be linked positively to the the level...