Collective Annuities and Redistribution
1
TSE-R -
Toulouse School of Economics
2 IDEI - Institut d'Economie Industrielle
3 GREMAQ - Groupe de recherche en économie mathématique et quantitative
4 IUF - Institut universitaire de France
5 PSE - Paris-Jourdan Sciences Economiques
6 PSE - Paris School of Economics
7 CORE - Center of Operation Research and Econometrics [Louvain]
8 CREPP - Center of Research in Public Economics and Population Economics
2 IDEI - Institut d'Economie Industrielle
3 GREMAQ - Groupe de recherche en économie mathématique et quantitative
4 IUF - Institut universitaire de France
5 PSE - Paris-Jourdan Sciences Economiques
6 PSE - Paris School of Economics
7 CORE - Center of Operation Research and Econometrics [Louvain]
8 CREPP - Center of Research in Public Economics and Population Economics
Résumé
This paper studies the role of alternative pension systems that offer collective annuities. The defining characteristic of collective annuities is that they do not depend on an individual's survival probabilities. We show that such a system may be welfare improving (with a utilitarian social welfare function) even when private annuity markets are perfect and when life expectancy and earning abilities are positively correlated (i.e., in a setting that is a priori biased against collective annuities). We first concentrate on linear pension systems and contrast two schemes: a pure contributory (Bismarckian) pension and a flat rate (Beveridgean) pension. We show that the case for collective annuities is stronger when they are associated with a flat pension system. Then we analyze nonlinear pension schemes. We show that the solution can be implemented by a pension scheme associated with annuities that reflect some degree of "collectiveness." Unlike under pure collective annuities, benefits do depend on life expectancy but to a lesser degree than with actuarially fair private annuities. In other words, the impact of survival probabilities is mitigated rather than completely neutralized.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Collective Annuities and Redistribution
|
Résumé |
en
This paper studies the role of alternative pension systems that offer collective annuities. The defining characteristic of collective annuities is that they do not depend on an individual's survival probabilities. We show that such a system may be welfare improving (with a utilitarian social welfare function) even when private annuity markets are perfect and when life expectancy and earning abilities are positively correlated (i.e., in a setting that is a priori biased against collective annuities). We first concentrate on linear pension systems and contrast two schemes: a pure contributory (Bismarckian) pension and a flat rate (Beveridgean) pension. We show that the case for collective annuities is stronger when they are associated with a flat pension system. Then we analyze nonlinear pension schemes. We show that the solution can be implemented by a pension scheme associated with annuities that reflect some degree of "collectiveness." Unlike under pure collective annuities, benefits do depend on life expectancy but to a lesser degree than with actuarially fair private annuities. In other words, the impact of survival probabilities is mitigated rather than completely neutralized.
|
Auteur(s) |
Helmuth Cremer
1, 2, 3, 4
, Jean-Marie Lozachmeur
1, 2, 3
, Pierre Pestieau
5, 6, 7, 8
1
TSE-R -
Toulouse School of Economics
( 93477 )
- Manufacture de Tabacs, 21 allées de Brienne 31000 Toulouse
- France
2
IDEI -
Institut d'Economie Industrielle
( 199449 )
- Manufacture des Tabacs, Aile Jean-Jacques Laffont, 21 allée de Brienne 31015 Toulouse Cedex 6
- France
3
GREMAQ -
Groupe de recherche en économie mathématique et quantitative
( 744 )
- manufacture des tabacs - bat. F 21 Allée de Brienne 31000 TOULOUSE
- France
4
IUF -
Institut universitaire de France
( 56663 )
- Maison des Universités 103 Boulevard Saint-Michel 75005 Paris
- France
5
PSE -
Paris-Jourdan Sciences Economiques
( 139754 )
- 48 boulevard Jourdan 75014 Paris
- France
6
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
7
CORE -
Center of Operation Research and Econometrics [Louvain]
( 48233 )
- 34, Voie du Roman Pays B-1348 Louvain-la-Neuve
- Belgique
8
CREPP -
Center of Research in Public Economics and Population Economics
( 143557 )
- Belgique
|
Comité de lecture |
Oui
|
Vulgarisation |
Non
|
Langue du document |
Anglais
|
Nom de la revue |
|
Audience |
Non spécifiée
|
Date de publication |
2010-02
|
Volume |
12
|
Numéro |
1
|
Page/Identifiant |
23-41
|
Public visé |
Scientifique
|
Sous-type de document pour les Articles |
Research article
|
Version du document |
version éditeur
|
Voir aussi |
|
Domaine(s) |
|
Indexation contrôlée |
|
DOI | 10.1111/j.1467-9779.2009.01445.x |
ProdINRA | 316675 |
UT key WOS | 000273822700003 |
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