Redistributive effects of different pension systems when longevity varies by socioeconomic status.

ABSTRACT: We propose a general analytical framework to model the redistributive features of alternative pension systems when individuals face ex ante differences in mortality. Differences in life expectancy between high and low socioeconomic groups are often large and have widened recently in many countries. Such longevity gaps affect the actuarial fairness and progressivity of public pension systems. However, behavioral responses to longevity and policy complicate analysis of possible reforms. Here we consider how various pension systems would perform in an OLG setting with heterogeneous longevity and ability. We evaluate redistributive effects of three Notional Defined Contribution plans and three Defined Benefit plans, calibrated on the US case. Compared to a benchmark non-redistributive plan tha

SUBMITTER: Sanchez-Romero M 

PROVIDER: S-EPMC7351074 | biostudies-literature | 2020 Oct

REPOSITORIES: biostudies-literature