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- Title
PENSION FUNDING IN A UNIONIZED ECONOMY.
- Authors
Adam, Antonis; Moutos, Thomas
- Abstract
This paper analyzes the effects of pension funding for a small open economy in which wages are subject to bargaining. Using an overlapping-generations framework, we show that a reform away from a Pay-As-You-Go towards a funded pension system will be Pareto improving only if the reform results in a reduction in the steady-state unemployment rate. However, the reduction in the unemployment rate is by no means warranted: although for pension systems which involve a limited amount of intra-generational redistribution this is likely, for systems displaying a high degree of intra-generational redistribution the unemployment rate may well rise thus preventing the realization of welfare gains.
- Subjects
PENSION plan funding; PORTFOLIO management (Investments); PENSION trust management; UNEMPLOYMENT; PENSIONS; RETIREMENT income
- Publication
Scottish Journal of Political Economy, 2009, Vol 56, Issue 2, p213
- ISSN
0036-9292
- Publication type
Article
- DOI
10.1111/j.1467-9485.2009.00481.x