Arbeitspapier

Demographic change, endogenous labor supply and the political feasibility of pension reform

Options for reforming unfunded public pension schemes that are now being discussed all share the feature that the burden induced by demographic change would be shifted towards presently living and away from unborn generations. Existing models of the political economy of pension reform can not explain why such reform options are being discussed at all. We present an alternative model in which the possibility of evasion of workers from payment of social security taxes is taken into account by modelling a labor supply function. It turns out that the burden of demographic change may fall completely or at least predominantly on the pensioners. Thus this type of model can much better explain recent trends in legislature on unfunded public pension systems in industrial democracies.

Language
Englisch

Bibliographic citation
Series: DIW Discussion Papers ; No. 202

Classification
Wirtschaft
Social Security and Public Pensions
Demographic Economics: Public Policy
Time Allocation and Labor Supply
Subject
Public Pensions
Endogenous Labor Supply
Demographic Change
Rentenreform
Alternde Bevölkerung
Ökonomische Theorie der Demokratie
Arbeitsangebot
Overlapping Generations
Rentenfinanzierung
Umlageverfahren
Theorie

Event
Geistige Schöpfung
(who)
Breyer, Friedrich
Stolte, Klaus
Event
Veröffentlichung
(who)
Deutsches Institut für Wirtschaftsforschung (DIW)
(where)
Berlin
(when)
2000

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Breyer, Friedrich
  • Stolte, Klaus
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Time of origin

  • 2000

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