Flexible Pension Take-up in Social Security

Y. Adema, J. Bonenkamp, A.C. Meijdam

Research output: Working paperDiscussion paperOther research output

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Abstract

Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Number of pages40
Volume2013-043
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-043

Fingerprint

Social security
Pensions
Redistribution
Life expectancy
Pareto
Early retirement
Welfare effects
Pension scheme
Cohort
Retirement
Pareto improvement
Pay-as-you-go pension
Overlapping generations model
Entitlement
Life span

Keywords

  • redistribution
  • retirement
  • flexible pensions

Cite this

Adema, Y., Bonenkamp, J., & Meijdam, A. C. (2013). Flexible Pension Take-up in Social Security. (CentER Discussion Paper; Vol. 2013-043). Tilburg: Economics.
Adema, Y. ; Bonenkamp, J. ; Meijdam, A.C. / Flexible Pension Take-up in Social Security. Tilburg : Economics, 2013. (CentER Discussion Paper).
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Adema, Y, Bonenkamp, J & Meijdam, AC 2013 'Flexible Pension Take-up in Social Security' CentER Discussion Paper, vol. 2013-043, Economics, Tilburg.

Flexible Pension Take-up in Social Security. / Adema, Y.; Bonenkamp, J.; Meijdam, A.C.

Tilburg : Economics, 2013. (CentER Discussion Paper; Vol. 2013-043).

Research output: Working paperDiscussion paperOther research output

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N2 - Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.

AB - Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.

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Adema Y, Bonenkamp J, Meijdam AC. Flexible Pension Take-up in Social Security. Tilburg: Economics. 2013. (CentER Discussion Paper).