Smoothing the Implicit Tax Rate in a Pay-as-you-go Pension System - 10.1628/0015221012904913 - Mohr Siebeck
Wirtschaftswissenschaft

Mathias Kifmann, Dirk Schindler

Smoothing the Implicit Tax Rate in a Pay-as-you-go Pension System

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Jahrgang 57 () / Heft 3, S. 261-283 (23)

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In this paper, we analyze how the implicit tax rate can be smoothed in a pay-as-you-go system if life expectancy increases or if the rate of population growth declines. We show that generation-specific contribution or replacement rates are necessary to smooth the implicit tax rate. Partial funding of the pension system is indispensable if the rate of population growth falls. If life expectancy increases, the contribution rate fluctuates and may not converge to a new steady state value unless funded elements are introduced.
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Mathias Kifmann Born 1970; 1991–96 studies of economics at Ludwig-Maximilian's University in Munich and at the London School of Economics; since 1996 assistant at the University of Constance; 2001 PhD at the University of Constance.

Dirk Schindler Geboren 1974; Studium der Volkswirtschaftslehre in Konstanz; Forschungsaufenthalt an der Norwegian School of Economics and Business Administration, Bergen; 2004 Promotion; wiss. Assistent im Fachbereich Wirtschaftswissenschaften der Universität Konstanz.