IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/1734.html
   My bibliography  Save this paper

The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System

Author

Listed:
  • Sinn, Hans-Werner

Abstract

It is shown that the net fiscal externality created by an additional member of a pay-as-you-go-pension system that is endowed with individual accounts equals the gross contributions of this member. In Germany, this equals about 175,000 Deutsche marks. The paper uses this information to design a hybrid funded system that avoids this externality and improves the public pension system under equity and efficiency considerations.

Suggested Citation

  • Sinn, Hans-Werner, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System," CEPR Discussion Papers 1734, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1734
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1734
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Feldstein, Martin, 1996. "The Missing Piece in Policy Analysis: Social Security Reform," American Economic Review, American Economic Association, vol. 86(2), pages 1-14, May.
    2. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, April.
    3. Martin Feldstein, 1995. "Would Privatizing Social Security Raise Economic Welfare?," NBER Working Papers 5281, National Bureau of Economic Research, Inc.
    4. Howitt, Peter & Sinn, Hans-Werner, 1989. "Gradual Reforms of Capital Income Taxation," American Economic Review, American Economic Association, vol. 79(1), pages 106-124, March.
    5. Homburg, Stefan, 1990. "The Efficiency of Unfunded Pension Schemes," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 146, pages 640-647.
    6. Martin Feldstein & Andrew Samwick, 1997. "The Economics of Prefunding Social Security and Medicare Benefits," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 115-164, National Bureau of Economic Research, Inc.
    7. Cigno, Alessandro, 1993. "Intergenerational transfers without altruism : Family, market and state," European Journal of Political Economy, Elsevier, vol. 9(4), pages 505-518, November.
    8. Alessandro Cigno, 2011. "The Economics of Marriage," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 28-41, May.
    9. Cigno, Alessandro & Rosati, Furio C., 1996. "Jointly determined saving and fertility behaviour: Theory, and estimates for Germany, Italy, UK and USA," European Economic Review, Elsevier, vol. 40(8), pages 1561-1589, November.
    10. repec:cai:popine:popu_p1989_44n2_0415 is not listed on IDEAS
    11. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, 2000. "Can Immigration Alleviate the Demographic Burden?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 1-21, September.
    12. Jürg Niehans, 1966. "Eine vernachlässigte Beziehung zwischen Bodenpreis, Wirtschaftswachstum und Kapitalzins," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 102(II), pages 195-200, June.
    13. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 1-25.
    14. repec:mhr:btrfin:urn:isbn:9783161468896 is not listed on IDEAS
    15. Stefan Homburg, 1991. "Interest and Growth in an Economy with Land," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 450-459, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinn, Hans-Werner, 2004. "The pay-as-you-go pension system as fertility insurance and an enforcement device," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1335-1357, July.
    2. Marek Loužek, 2006. "Má důchodová reforma se zadlužením smysl? [Has pension reform with indebtedness a sense?]," Politická ekonomie, Prague University of Economics and Business, vol. 2006(2), pages 247-260.
    3. Hirte, Georg, 2001. "Pension Policies for an Aging Society," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 14, number urn:isbn:9783161475399, September.
    4. Marek Loužek, 2007. "Pension Reform in the Czech Republic - A Contribution into the Debate," Prague Economic Papers, Prague University of Economics and Business, vol. 2007(1), pages 55-69.
    5. Meier, Volker & Wrede, Matthias, 2010. "Pensions, fertility, and education," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(1), pages 75-93, January.
    6. Volker Meier & Martin Werding, 2010. "Ageing and the welfare state: securing sustainability," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 26(4), pages 655-673, Winter.
    7. Andersen, Torben M. & Bhattacharya, Joydeep & Gestsson, Marias H., 2021. "Pareto-improving transition to fully funded pensions under myopia," Journal of Demographic Economics, Cambridge University Press, vol. 87(2), pages 169-212, June.
    8. Assar Lindbeck & Mats Persson, 2003. "The Gains from Pension Reform," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 74-112, March.
    9. Cigno, A., 2016. "Conflict and Cooperation Within the Family, and Between the State and the Family, in the Provision of Old-Age Security," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 609-660, Elsevier.
    10. Filoso, Valerio & Papagni, Erasmo, 2015. "Fertility choice and financial development," European Journal of Political Economy, Elsevier, vol. 37(C), pages 160-177.
    11. Marko Köthenbürger & Panu Poutvaara, 2002. "Social Security Reform and Intergenerational Trade: Is there Scope for a Pareto-Improvement?," CESifo Working Paper Series 795, CESifo.
    12. Hans-Werner Sinn, 1999. "Pension Reform and Demographic Crisis: Why a Funded System is Needed and why it is not Needed," CESifo Working Paper Series 195, CESifo.
    13. repec:dpr:wpaper:0905 is not listed on IDEAS
    14. Scholten, Ulrich, 2000. "Rotating Savings and Credit Associations in Developed Countries: The German-Austrian Bausparkassen," Journal of Comparative Economics, Elsevier, vol. 28(2), pages 340-363, June.
    15. Kai A. Konrad & Wolfram F. Richter, 2005. "Zur Berücksichtigung von Kindern bei umlagefinanzierter Alterssicherung," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(1), pages 115-130, February.
    16. Oskari Juurikkala, 2007. "Pensions, Fertility And Families," Economic Affairs, Wiley Blackwell, vol. 27(4), pages 52-57, December.
    17. Alessandro Cigno, 2006. "A constitutional theory of the family," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(2), pages 259-283, June.
    18. Idris, Asma Rashidah & Habibullah, Muzafar & Haji Din, Badariah, 2018. "Does Financial Development Contribute to Fertility Decline in Malaysia? An Empirical Investigation," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(1), pages 191-203.
    19. Francesco C. Billari & Vincenzo Galasso, 2008. "What Explains Fertility? Evidence from Italian Pension Reforms," CSEF Working Papers 209, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    20. Robert Fenge & Beatrice Scheubel, 2017. "Pensions and fertility: back to the roots," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(1), pages 93-139, January.
    21. Charles Yuji Horioka, 2014. "The Life and Work Of Martin Stuart (“Marty”) Feldstein," UP School of Economics Discussion Papers 201410, University of the Philippines School of Economics.

    More about this item

    Keywords

    Children; Immigration; Pay-As-You-Go; Pension Systems;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:1734. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.