This paper discusses the efficiency of a pay-as-you-go pension reform by introducing a child benefit in an endogenous fertility setting. In the model of a small open economy, higher fertility is associated with a reduction of lifetime labor supply. The optimum share of fertility-related pensions...

This paper discusses alternative ways to deal with the positive externalities of having children in a pay-as-you-go pension system. Family allowances are compared to introducing a fertility-related component into the pension formula. In an endogenous labor supply setting, both instruments are...

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...

The paper analyses the impact of demographic developments on the German pension system until the year 2060. The projections are simulated for a range of assumptions on the latest demographic trends and on the labour market and comprise the latest pension legislation. As a central innovation we...

We investigate numerically how indexation of funded pensions for inflation can be differentiated across the various groups of fund participants. The pension arrangement is modelled after the Dutch situation. While the aggregate welfare consequences are small, group-specific consequences are more...

We explore the benefits of intergenerational risk-sharing through both private funded pensions and via the public debt. We use a multi-period overlapping generations model with a PAYG pension pillar, a funded pension pillar and a government. Shocks are smoothed via the public debt and variations...

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper is the first to provide detailed evidence based on historical data on the mechanism by which a public pension system depresses fertility. Our...

In the literature, several approaches have been taken to measure the impact of demographic ageing on public pension schemes, with particular attention being paid to potential fiscal imbalances across the generations involved in demographic transition. In this paper, we review three of these...