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

Abstract

Transfer Accounts (NTA) for explaining and projecting trends in public finances". Alan Auerbach provided useful comments. The content is solely the responsibility of the authors and does not necessarily represent the views of any of the above. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

The Finnish Pension System and Its Future Challenges

“…Moreover, an increase in the statutory retirement age means that the share of one's lifetime as pensioner declines more for the less educated. This is seen as unfair (Sánchez-Romero et al, 2019).…”

The Impact of Reducing the Pension Generosity on Inequality and Schooling

“…However, the former policy increases inequality across socioeconomic groups. Sanchez-Romero et al (2019) show that the US Social Security reduces regressivity from longevity differences, but would require group-specific life tables to achieve progressivity. In addition, they find that without separate life tables, despite apparent accounting gains, lower income groups would suffer welfare losses and higher income groups would enjoy welfare gains through indirect effects of pension systems on labor supply.…”

“…Several papers have recently analyzed the redistributive effects of pension systems when longevity varies across socioeconomic groups both empirically (Academies and of Sciences, Engineering, and Medicine 2015; Haan et al 2019;Holzmann et al 2019) and theoretically (Pestieau and Ponthiere 2016;Laun et al 2019;Sanchez-Romero et al 2019). The main conclusion from the empirical literature is that pension systems are becoming increasingly regressive due to the increase in the longevity gap across socioeconomic groups.…”

Social Security Reform with Heterogeneous Mortality

“…While it has been long recognized that heterogeneous mortality affects the lifetime progressivity of Social Security (Aaron 1977), and multiple studies have sought to quantify this effect (recent analyses include Goda et al 2011;Bosworth and Burke 2014; National Academies of Sciences, Engineering, and Medicine 2015; and Sheshinski and Caliendo 2018), there has been relatively little progress in quantifying its implications for optimal policies. Laun et al (2019) and Sánchez-Romero et al (2019) consider how to maintain fiscal sustainability in the presence of heterogeneous demographic change. (Also see Conesa et al 2019.…”

“…with the footprint held fixed. Sánchez-Romero et al (2019) consider systemic reforms in a general equilibrium framework with no health or wage uncertainty. Using a life-cycle model with heterogeneous mortality rates, Bagchi (2019) examines reforms to the Social Security benefit formula, but he does not consider claiming decisions.…”