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UID:f854548fa1f8d1fbd375a98488b1b645
CATEGORIES:Seminars
CREATED:20171102T190359
SUMMARY:Nicoleta Ciurila - University of Amsterdam
DESCRIPTION;ENCODING=QUOTED-PRINTABLE: How Should Pension Benefits Be Linked to Contributions in Pay-as-you-go Pe
 nsion Systems? \n\n\n \nAbstract:\n I compare in terms of macroeconomic out
 comes and welfare the current US pension system with the three most widespr
 ead types of pension benefit arrangements: i) a flat benefit (FL) system th
 at pays the same pension regardless of the amount of previous contributions
 , ii) a notional defined contribution (NDC) system in which benefits are ba
 sed on previous accrued contributions and iii) a defined benefit (DB) syste
 m in which pensions are a constant replacement rate times the average life-
 time earnings. I show that the current US system imposes an implicit tax on
  continuing to work after the early retirement age that distorts labor supp
 ly at the extensive margin substantially. This outweighs the insurance agai
 nst idiosyncratic shocks provided by the fact that the replacement rate dec
 reases with average lifetime earnings under the current US pension system. 
 Overall, the steady state of the economy with the US pension system is the 
 worst performing in terms of welfare. Welfare is the highest in the steady 
 state with the FL pension system due to the better insurance provided by th
 e system, although labor supply distortions are higher, mainly at the inten
 sive margin. In the case of a higher contribution rate such as the one prev
 ailing in the Italian pension system, the FL system still provides the high
 est welfare, but the difference compared to the NDC and the DB system is co
 nsiderably smaller. This is because a higher contribution rate imposes high
 er labor supply distortions. The NDC and the DB systems are similar in term
 s of macroeconomic outcomes and welfare. However, the DB system provides a 
 slightly higher labor supply, less insurance against shocks and a slightly 
 higher welfare than the NDC system.\n
DTSTAMP:20260406T112352Z
DTSTART:20170920T130000Z
DTEND:20170920T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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