Mandatory pension systems only partially replace old-age income, therefore the government also operates a voluntary pension system, where savings are matched by government grants. Accounting for the resulting tax expenditure, our models describe the income flow from shortsighted to farsighted...

In his seminal model (Feldstein, 1985), the government operates a social security system to counter the representative worker's myopia. (i) For a complete myope, he determined a sizable optimal tax rate (and the corresponding benefit level). (ii) For a partially shortsighted worker, he...

The dependence of benefit on the retirement age (the schedule) is an important feature in any public pension system. The nonfinancial defined contribution (NDC) pension system has recently become popular mainly because of its allegedly actuarial fairness. Using the framework of mechanism design...

Initial public pensions are indexed to the economy-wide average wages, but pensions in progress are indexed to prices, average wages or their combinations - varying across countries and periods. We create a simple overlapping cohorts framework to study the properties of indexing pensions in...

We fully display a cohort model of an economy with an aging population, taking into account varying family size, habit formation, inheritance and credit constraints. Filling the model with numbers, we are able to compare different pension reforms: 1. the base run, 2. the reduced accrual rates,...

When and how to subsidize tax-favored pension accounts? To defend myopic workers against themselves, the government introduces a mandatory system but to help savers, it adds taxfavored retirement accounts. If the mandatory system is progressive, then a proportional voluntary system can...

A general framework is analyzed which contains several special transfer (tax and pension) models. In our static two-overlapping-generation framework, every individual works in the first stage of the adult age, while is retired in the second. The government operates a balanced linear transfer...

In our model, the government operates a mandatory proportional pension system to substitute for the low life-cycle savings of the lower-paid myopes, while maintaining the incentives of the higher-paid, far-sighted in contributing to the system. The introduction of an appropriate cap on pension...