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We model the optimal reaction of a public 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 that mimic the pension systems observed in the real world. The...
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, exploiting administrative data from Germany and the 2004 enlargement of the European Union. We find that immigrants who enter … Germany when a unit of earnings from Germany allows for larger consumption at home settle for lower entry wages, but …
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