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The transitional impact of state pension reform

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  • Pandolfo, Jordan
  • Winkelmann, Kurt

Abstract

We use an overlapping generations framework to evaluate the transitional impact of state pension reform on public and private workers, extending our analysis to all fifty U.S. states. We consider reducing cost-of-living-adjustments (COLAs) for retirees and reducing benefit accruals for current workers. The magnitude of reform in each state is calibrated to achieve a common policy goal: the elimination of unfunded pension liabilities within twenty years.

Suggested Citation

  • Pandolfo, Jordan & Winkelmann, Kurt, 2024. "The transitional impact of state pension reform," Journal of Economic Dynamics and Control, Elsevier, vol. 160(C).
    • Handle: RePEc:eee:dyncon:v:160:y:2024:i:c:s0165188923002130
    DOI: 10.1016/j.jedc.2023.104807
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    More about this item

    Keywords

    Pension reform; State public pensions; Lifecycle; Overlapping generations; Retirement;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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