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Public pension systems and distortions of intra-EU mobility: the Lodge Test

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  • FENGE, ROBERT
  • VON WEIZSÄCKER, JAKOB

Abstract

In this paper, we analyse how national public pension systems can distort intra-EU movements of workers despite the existing totalization/proratization agreement. As a benchmark test, we propose the ‘Lodge Test’ of mobility neutrality: Two identical individuals who swap countries and jobs should receive the same pension claims in either of the two pension systems compared to a situation where each would have stayed at home. Using the Lodge Test, we identify those features of national pension formulae that are systematically mobility distorting and discuss possible remedies.

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  • Fenge, Robert & Von Weizsäcker, Jakob, 2010. "Public pension systems and distortions of intra-EU mobility: the Lodge Test," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(2), pages 263-275, April.
    • Handle: RePEc:cup:jpenef:v:9:y:2010:i:02:p:263-275_00
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    1. Breyer, Friedrich & Kolmar, Martin, 2002. "Are national pension systems efficient if labor is (im)perfectly mobile?," Journal of Public Economics, Elsevier, vol. 83(3), pages 347-374, March.
    2. Alain Jousten & Pierre Pestieau, 2002. "Labor Mobility, Redistribution, and Pension Reform in Europe," NBER Chapters, in: Social Security Pension Reform in Europe, pages 85-108, National Bureau of Economic Research, Inc.
    3. Stefan Homburg & Wolfram Richter, 1993. "Harmonizing public debt and public pension schemes in the European community," Journal of Economics, Springer, vol. 7(1), pages 51-63, December.
    4. Holzmann, Robert & Koettl, Johannes & Chernetsky, Taras, 2005. "Portability regimes of pension and health care benefits for international migrants: an analysis of issues and good practices," Social Protection Discussion Papers and Notes 32750, The World Bank.
    5. Robert Fenge & Martin Werding, 2004. "Ageing and the tax implied in public pension schemes: simulations for selected OECD countries," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 159-200, June.
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    1. Robert Holzmann & Johannes Koettl, 2015. "Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, and Issues," CESifo Economic Studies, CESifo Group, vol. 61(2), pages 377-415.
    2. Anna Cristina d'Addio & Maria Chiara Cavalleri, 2015. "Labour Mobility and the Portability of Social Rights in the EU," CESifo Economic Studies, CESifo Group, vol. 61(2), pages 346-376.
    3. Holzmann, Robert & Koettl, Johannes, 2011. "Portability of pension, health, and other social benefits : facts, concepts, issues," Social Protection Discussion Papers and Notes 62725, The World Bank.

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