Labor income risk, demographic risk, and the design of (wage-indexed) social security

Arbeitspapier

Pay-as-you-go pension programs can help to share risk amongst generations. While a wage-indexed pension program is best suited to share labor income risk, I show that the combination of stochastic labor income and stochastic population growth may reduce the possibilities for intergenerational risk sharing: Labor income risk can only be shared when individuals are also exposed to demographic risk. For demographic uncertainty the usual categorization of pension programs does not suffice. I therefore introduce policies on how the demographic uncertainty is transmitted via social security. An optimal demographic indexation is derived for a small open economy and a closed economy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 100

Classification and Topics

• Classification: Wirtschaft
• Subject: intergenerational risk sharing ; social security ; demography ; Gesetzliche Rentenversicherung ; Overlapping Generations ; Einkommen ; Bevölkerungsentwicklung ; Risiko ; Lohnindexierung ; Lebenszyklus ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Borgmann, Christoph
• Event: Veröffentlichung
• (who): Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft
• (where): Freiburg i. Br.
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/56409
• URN: urn:nbn:de:bsz:25-opus-18711
• Last update: 10.03.2025, 11:43 AM CET