Trade and Pension Systems
25 Pages Posted: 7 Mar 2008
Date Written: 2006
Abstract
This article concentrates on the possible relationship between trade and pension systems. I consider trade between a capital-abundant home and a labor-abundant foreign country. The underlying model is a two-period overlapping generations-model augmented with factor-price changes resulting from price-variations through globalization. First, I analyze the resulting income effects of the young generation and of the retirees in a pay-as-you-go (PAYG) pension system and a fully funded pension system. Considering contribution rates and population growth, the retirees might improve their income situation in a fully funded system. Second, I analyze the effects on life income when a pension system change is implemented simultaneous with the reduction of trade barriers. A less expensive change can be expected, if free trade is permitted.
Keywords: Pay-as-you-go pension system, fully funded pension system, Heckscher-Ohlin-Samuelson, trade with low-wage-countries
JEL Classification: F10, H55
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Demography, National Savings and International Capital Flows
-
Population Aging and Global Capital Flows in a Parallel Universe
By Robin Brooks
-
The Developed World's Demographic Transition - the Roles of Capital Flows, Immigration, and Policy
By Hans Fehr, Sabine Jokisch, ...
-
Aging, Pension Reform, and Capital Flows: A Multi-Country Simulation Model
By Axel H. Börsch-supan, Alexander Ludwig, ...
-
Capital Flows to the New World as an Intergenerational Transfer
-
The Demographic Transition in Closed and Open Economies: A Tale of Two Regions
-
Domestic Saving and International Capital Flows Reconsidered
-
Population Aging and International Capital Flows
By David Domeij and Martin Flodén