Flexible Pension Take-up in Social Security

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

Research output: Working paperDiscussion paperOther research output

379 Downloads (Pure)

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

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.