Who Cares About the Day after Tomorrow? Pension Issues When Households are Myopic or Time Inconsistent

41 Pages Posted: 19 Jan 2017

See all articles by Axel H. Börsch-Supan

Axel H. Börsch-Supan

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Klaus Härtl

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)

Duarte Nuno Leite

Max Planck Institute for Social Law and Social Policy; Universidade do Porto - CEF.UP - Center for Economics and Finance at UP

Multiple version iconThere are 2 versions of this paper

Date Written: January 11, 2017

Abstract

English Abstract: Pension economics has traditionally guided pension policy with the help of formal models based on individuals who think in a life cycle context with perfect foresight, full information and in a time-consistent manner. This paper sheds light on selected aspects of pension economics when these assumptions do not hold. We focus on three aspects which are particularly relevant for the quickly aging Asian economies: the volume of savings for old-age provisions, international diversification of retirement savings, and global spillover effects of pension reforms.

German Abstract: Die wissenschaftliche Forschung stützt ihre Empfehlungen für die Rentenpolitik traditionell auf formale Modelle. Diese basieren regelmäßig auf der Lebenszyklushypothese, im Rahmen derer rationale Individuen mit perfekter Voraussicht und vollständiger Information betrachtet werden, welche auf eine logische Art und Weise bzgl. der zeitlichen Abfolge ihrer Entscheidungen handeln. Diese Studie beleuchtet ausgewählte Aspekte, in welchen die starren Annahmen der Lebenszyklushypothese nicht weiter gelten. Wir konzentrieren uns dabei auf drei Aspekte, die besonders relevant sind für asiatische Volkswirtschaften mit schnell alternder Bevölkerung: erstens, die Höhe der Ersparnisse für die Altersvorsorge, zweitens, die internationale Diversifikation der Altersvorsorgeaufwendungen und drittens, internationale Auswirkungen von Rentenreformen.

Keywords: population aging, social security, life-cycle saving, public insurance, pension reform, retirement age

JEL Classification: C68, D91, E21, F21, H55, J11, J26

Suggested Citation

Börsch-Supan, Axel H. and Härtl, Klaus and Leite, Duarte Nuno, Who Cares About the Day after Tomorrow? Pension Issues When Households are Myopic or Time Inconsistent (January 11, 2017). Max Planck Institute for Social Law and Social Policy Discussion Paper No. 01-2017. Available at SSRN: https://ssrn.com/abstract=2898252 or http://dx.doi.org/10.2139/ssrn.2898252

Axel H. Börsch-Supan (Contact Author)

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany

HOME PAGE: http://www.mea.mpisoc.mpg.de

Klaus Härtl

Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA) ( email )

Amalienstrasse 33
Munich, 80799
Germany
+49-(0)89-38602-351 (Phone)

HOME PAGE: http://mea.mpisoc.mpg.de/index.php?id=230&no_cache=1&tx_meamitarbeiteranzeige_pi1[showUid]=1133&cHas

Duarte Nuno Leite

Max Planck Institute for Social Law and Social Policy ( email )

Amalienstraße 33
München, 80799
Germany

Universidade do Porto - CEF.UP - Center for Economics and Finance at UP ( email )

Rua Dr. Roberto Frias
Porto, 4200-464
Portugal

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