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Some Notes On The Redistribution Inherent In The U.S. Public Pension System

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  • Sergio Nisticò
  • Mirko Bevilacqua

Abstract

This paper shows that the U.S. Old‐Age Insurance (OAI) does not eliminate all the regressive redistribution characterizing earnings‐related schemes. The benchmark against which OAI is tested is the one‐to‐one contribution‐benefit rule of the Notional Defined Contribution (NDC) scheme. The paper suggests that by redesigning OAI according to the NDC scheme workers would perceive the higher contributions needed to finance current obligations not as a tax but as an increase in mandatory savings rewarded with the pay‐as‐you‐go interest rate and a stream of pension annuities more generous than that it would be possible to pay at the current contribution rate. (JEL H55, J26)

Suggested Citation

  • Sergio Nisticò & Mirko Bevilacqua, 2018. "Some Notes On The Redistribution Inherent In The U.S. Public Pension System," Contemporary Economic Policy, Western Economic Association International, vol. 36(3), pages 566-581, July.
    • Handle: RePEc:bla:coecpo:v:36:y:2018:i:3:p:566-581
    DOI: 10.1111/coep.12271
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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