Discussion paper

DP1734 The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal For a Partial Transition to a Funded System

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.

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Citation

Sinn, H (1997), “DP1734 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 Press Discussion Paper No. 1734. https://cepr.org/publications/dp1734