Life expectancy heterogeneity and the political support for collective annuities

Cremer, Helmuth and De Donder, Philippe (2014) Life expectancy heterogeneity and the political support for collective annuities. TSE Working Paper, n. 14-496

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Official URL: http://tse-fr.eu/pub/7636

Abstract

Individuals, differing in productivity and life expectancy, vote over the size and type of a collective annuity. Its type is represented by the fraction of the contributive (Bismarckian) component (based on the worker's past earnings) as opposed to the non-contributive (Beveridgean) part (based on average contribution). The equilibrium collective annuity is either a large mostly Bismarckian program, a smaller pure Beveridgean one (in accordance with empirical evidence), or nil. A larger correlation between longevity and productivity, or a larger average life expectancy, both make the equilibrium collective annuity program more Beveridgean, although at the expense of its size.

Item Type: Monograph (Working Paper)
Language: English
Date: May 2014
Uncontrolled Keywords: generosity, redistributiveness, pay-as-you-go pensions, collective annuity, longevity, Kramer-Shepsle structure-induced equilibrium
JEL codes: D78 - Positive Analysis of Policy-Making and Implementation
H55 - Social Security and Public Pensions
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 18:15
Last Modified: 07 Mar 2018 13:23
OAI ID: oai:tse-fr.eu:7636
URI: http://publications.ut-capitole.fr/id/eprint/16202

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