In this paper I use a multi-period OLG model to study how a demographic shock is distributed among different generations. In particular, I investigate whether a funded pension system allows for a smoother adjustment than an unfunded system. The results suggest that the answer to this question...

Due to the accelerating demographic change of the population the reform of the existing pension systems constitutes one of the greatest political challenges in most European countries. A theoretical discussion of different pension reforms must incorporate not only the demographic aspect but also...