A note on intergenerational risk sharing and the design of pay-as-you-go pension programs
Thogersen, O.
Journal of Population Economics 11(3): 373-378
1998
ISSN/ISBN: 0933-1433 PMID: 12294152 Document Number: 277027
"Different versions of pay-as-you-go public pension programs may have entirely different effects on the intergenerational distribution of income risk. If the pension benefit is a fixed proportion of previous labor income, a pay-as-you-go program increases the net income risk of all generations. On the other hand, a pay-as-you-go program characterized by a fixed labor income tax rate and uncertain pension benefits provides intergenerational risk sharing."