Pareto-improving transition from a pay-as-you-go to a fully funded pension system in a model with differing earning abilities
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Pareto-improving transition from a pay-as-you-go to a fully funded pension system in a model with differing earning abilities
Fenge, Robert | Schwager, Robert
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 115 (1995), Iss. 3 : pp. 367–376
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Fenge, Robert
Schwager, Robert
Cited By
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Does Old Capital Matter for Implementing a Pareto-Improving Tax Reform?
Gaube, Thomas
Schwager, Robert
Public Finance Review, Vol. 32 (2004), Iss. 2 P.220
https://doi.org/10.1177/1091142103261677 [Citations: 0]
Abstract
This paper resumes the discussion whether a Pareto-improving transition from a pay-as-you-go to a fully funded pension system is possible. In contrast to recent work it is shown that in a model with differing individuals, where labour supply is endogenous and contributions to the pay-as-you-go system are raised as an income tax, its abolition is a Pareto-improvement if the labour incomes of both individuals do not differ too much or if the distortion by the wage tax is large.