Alternative Risk-Sharing Mechanisms of Social Security - 10.1628/001522110X524188 - Mohr Siebeck
Economics

Øystein Thøgersen, Kine Bøhlerengen

Alternative Risk-Sharing Mechanisms of Social Security

Section: Articles
FinanzArchiv (FA)

Volume 66 () / Issue 2, pp. 134-152 (19)

19,00 € including VAT
article PDF
Adopting a portfolio choice approach to pension design, we derive illuminating closed form solutions for optimal pay-as-you-go social security programs. We demonstrate that the nature of the implied risk-sharing effects and their magnitudes are sensitive to the stochastic specification of aggregate wage income growth (i.e. the implicit return on the pay-as-you-go program). Considering individuals in any generation from a »Rawlsian«, prebirth perspective, fairly large pay-as-you-go programs in terms of the magnitude of the optimal contribution rate can be rationalized if wage shocks are not permanent.
Authors/Editors

Øystein Thøgersen No current data available.

Kine Bøhlerengen No current data available.