Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2013-07-16
Number: 13-091/VI
Author-Name: Yvonne Adema
Author-Workplace-Name: Erasmus University Rotterdam, Netspar
Author-Name: Jan Bonenkamp
Author-Workplace-Name: CPB Netherlands Bureau for Economic Policy Analysis, The Hague, Netspar, The Netherlands
Author-Name: Lex Meijdam
Author-Workplace-Name: CentER, Tilburg University, Netspar, The Netherlands
Title: Flexible Pension Take-up in Social Security
Abstract: This paper studies the redistribution and welfare effects of increasing the flexibility of individual pension take-up. We use an overlapping-generations model with Beveridgean pay-as-you-go pensions, where individuals differ in ability and life span. We find that introducing flexible pension take-up can induce a Pareto improvement when the initial pension scheme contains within-cohort redistribution and induces early retirement. Such a Pareto-improving reform entails the application of uniform actuarial adjustment of pension entitlements based on average life expectancy. Introducing actuarial non-neutrality that stimulates later retirement further improves such a flexibility reform.
Classification-JEL: H55, H23, J26
Keywords: redistribution, retirement, flexible pensions
File-Url: https://papers.tinbergen.nl/13091.pdf
File-Format: application/pdf
File-Size: 339695 bytes
Handle: RePEc:tin:wpaper:20130091