Reforming Pensions

30 Pages Posted: 21 Feb 2009

See all articles by Nicholas Barr

Nicholas Barr

London School of Economics

Peter A. Diamond

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 3 versions of this paper

Date Written: January 2009

Abstract

This article, based on two books (2008, forthcoming), sets out principles for pension design: pension systems have multiple objectives, analysis should consider the pension system as a whole, analysis should be in a second-best context, different systems share risks differently and have different effects by generation and by gender. The article considers policy implications: there is no single best pension design; earlier retirement does not reduce unemployment; unsustainable pension promises should be addressed directly; adding funding in a PAYG mandatory system may or may not be welfare improving; and implementation matters - design should not exceeds a country's capacity to implement.

Keywords: pension, social security

JEL Classification: H55

Suggested Citation

Barr, Nicholas and Diamond, Peter A., Reforming Pensions (January 2009). CESifo Working Paper Series No. 2523. Available at SSRN: https://ssrn.com/abstract=1330758

Nicholas Barr

London School of Economics ( email )

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Peter A. Diamond (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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