Purpose – This paper aims to analytically show that in an over-lapping-generation (OLG) model, low earning cohorts bear unwanted risk and absorb higher economic cost than high earning cohorts do. Design/methodology/approach – This paper aims to consider the individual’s risk appetite,...

Using an overlapping generations model, two new indicators of public pension system sustainability are proposed: the pension space, which measures the capacity to pay for pension expenditures out of labour taxation, and the pension space exhaustion probability reflecting demographic...

As in most economically developed countries, the birth rate has been low for decades in Hungary, and as a result, the population is constantly declining. At the same time, life expectancy at birth significantly increased over the last 20 years, nearly by two years for both men and women. As a...

This book is unique as it presents an academic and a practical aspect on managing pension funds to clarify the global debate on social security. The authors establish the basic choices in designating any system to help policy makers develop the system that achieves their many objectives

This study contributes to the discussion about a fair and balanced pension system with a collectively funded pension scheme or social security and a defined contribution pillar. With an invigorated risk approach using financial option positions, it considers the variance of socioeconomic...