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Do Redistributive Pension Systems Increase Inequalities and Welfare?

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  • Christophe Hachon

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Using a capital-skill complementarity technology, we analytically show that an increase in the direct redistributivity of Pay-As-You-Go (PAYG) pension systems has a positive impact on wages and on wage inequalities. We also show that life expectancyinequalities play an important role in the achievement of these results. Then, we calibrate our model and we and that, if life expectancy inequalities are suffciently high, a more redistributive pension system increases the wealth and the welfare of every agent of the economy. Moreover, such a policy decreases the tax rate of the pension system.

Suggested Citation

  • Christophe Hachon, 2008. "Do Redistributive Pension Systems Increase Inequalities and Welfare?," Working Papers halshs-00285040, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00285040
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00285040
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    2. Gustafsson, Johan, 2021. "Public Pension Reform and the Equity-Efficiency Trade-off," Umeå Economic Studies 992, Umeå University, Department of Economics.

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