Intergenerational Risk Sharing,Pensions, and Endogenous Labour Supply in General Equilibrium* |
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| Authors: | Roel M W J Beetsma Ward E Romp Siert J Vos |
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| Institution: | 1. University of Amsterdam, NL‐1018 WB Amsterdam, the Netherlands r.m.w.j.beetsma@uva.nl;2. University of Amsterdam, NL‐1018 WB Amsterdam, the Netherlands w.e.romp@uva.nl;3. MN Services, NL‐2595 AK The Hague, the Netherlands siert.vos@mn.nl |
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| Abstract: | We show that a two‐tier pension system, with a pay‐as‐you‐go first tier and a fully funded, defined wage‐indexed second tier, can provide for optimal intergenerational risk‐sharing without distorting the labour supply, thereby achieving the first best. Other arrangements with a fully‐funded second tier fail to achieve the first best. |
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| Keywords: | Defined wage‐indexed benefit funding overlapping generations pay‐as‐you‐go pension systems E21 |
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