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Intergenerational contracts and their decomposition: An extension

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Abstract

Pay-as-you-go financed state pension systems as means for public pension insurance seem to lose their attraction: economic growth is too slow to guarantee an internal rate of return matching the real interest rate. Therefore, efficiency reasons do not justify the introduction of this kind of old age insurance. Unfortunately, a transition from an existing pay-as-you-go system to a capital-funded pension scheme is shown not to be Pareto-improving.

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References

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Author notes

  1. Günther Lang

    Present address: Institute of Economics, Department of Public Finance, University of Bonn, Adenauerallee 24-42, D-5300, Bonn, Federal Republic of Germany

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    1. Günther Lang
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    I gratefully acknowledge the helpful comments of Dieter Bös and Wolfgang Peters, who told me what to publish and what to file in the archives. I am indebted to two anonymous referees for valuable and fundamental remarks. Furthermore, I want to thank the Deutsche Forschungsgemeinschaft for financial support via SFB 303.

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    Lang, G. Intergenerational contracts and their decomposition: An extension. Zeitschr. f. Nationalökonomie 52, 177–189 (1990). https://doi.org/10.1007/BF01227558

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    • DOI: https://doi.org/10.1007/BF01227558

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