life-cycle distributional consequences of pay-as-you-go and funded pension systems

a microsimulation modelling analysis

by Jane Falkingham

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Published 1993 by Finance and Private Sector Development Division, Policy Research Department, World Bank in Washington, D.C. (1818 H St., NW, Washington 20433) .
Written in English

Subjects:

• Pensions.,
• Defined contribution pension plans.

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Edition Notes

Statement	by Jane Falkingham and Paul Johnson.
Series	Policy research working papers ;, WPS 1200
Contributions	Johnson, Paul, 1955-
Classifications
LC Classifications	HG3881.5.W57 P63 no. 1200
The Physical Object
Pagination	75 p. :
Number of Pages	75
ID Numbers
Open Library	OL1169239M
LC Control Number	94151504

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  intergenerational fairness. The State Pension is a ‘pay as you go’ system, meaning that today’s workers pay for today’s pensioners. It is projected by the Office for Budget Responsibility that the cost of the State Pension will grow from 5% of GDP to % over a 45 year period, even assuming that the State Pension age rises with longevity. The studies in this book address these questions using computable general equilibrium models. They give illuminating insights and new empirical estimates of future prospects of pay-as-you-go pension schemes in the "big seven" OECD countries, the possible distortions introduced by the pension systems in four large European economies, the effects.

Most traditional social security systems are single-pillar pay-as-you-go defined benefit plans. In these plans a formula based on years of work and wages determines the pension promise that is made to each worker, and current payroll contributions from workers finance current payments to pensioners. C. Pay-as-you-go and Fully-funded Systems Financing a retirement system is typically described as a choice be-tween two fundamentally different approaches: pay-as-you-go (PAYGO) systems, or fully-funded systems In a PAYGO system, the nation's current retirees receive benefit checks from a government agency, whichAuthor: Neil H. Buchanan. The sizeable increase in income inequality experienced in advanced economies and many parts of the world since the s and the severe consequences of the global economic and financial crisis have brought distributional issues to the top of the policy agenda. The challenge for many governments is to address concerns over rising inequality while simultaneously promoting economic efficiency and.

The authors "explore the consequences of demographic change on a pension system which is sensitive to economic growth. In a theoretical discussion they first show that pay-as-you-go systems are in general more sensitive to changes in population growth and age structure than are funded systems. Note: FF = Fully-Funded system; PAYG = Pay-As-You-Go system Further, there are important differences among countries even within each of the four groups, with respect to the transition arrangements put in place for workers who were already participating in the . Duflo () uses pension reform in in South-Africa giv- ing all Blacks (65+) a minimum pension when household inome is low (before, only whites could get the pension under Apartheid) Duflo () finds that A A improves the weight for height Z-score of female grandchildren (nutrition improves) but only when a grandmother gets the B (and.