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Heterogeneity in pension policy

Authors: Baurin, Arno;

Heterogeneity in pension policy

Abstract

This thesis contributes to the public economics and economics of ageing literature. It focuses on heterogeneity in pension policy. In the first chapter, the heterogeneity relates to the age of individuals at the time of the reform. It analyses the distributional consequences of gradual pension reforms required to balance the intertemporal budget constraint, by adjusting either the accrual or the indexation rate. It shows that, based on employment and demographic forecasts for Belgium, 80% of the voting population would prefer the accrual reform to the indexation reform; implying that the youngest half of the population would bear 85% of the costs. So, there is a tradeoff between democracy and equality. The second chapter examines how pensions could account for occupation arduousness heterogeneity. It shows, using SHARE data, the possibility to infer a ranking of occupation arduousness from the health at old age. Then, it computes the adjustment of career length required to compensate for occupation arduousness. It concludes with caution by showing that the impact of occupation on health is dwarfed by that of childhood conditions. The third chapter considers lifespan heterogeneity. Life expectancy differs across income groups, and there is a growing consensus that this matters for pension policy. This chapter argues that, in addition to life expectancy, lifespan heterogeneity should also be looked at. It shows, using lifespan simulations based on US data from Chetty et al. (2016), that indexing retirement age to life expectancy differences could be misleading due to the large lifespan variance within income groups and the overlap of the lifespan distribution across them. (ECGE - Sciences économiques et de gestion) -- UCL, 2022

Country
Belgium
Related Organizations
Keywords

Ageing, Pension reform, Generational balance, Lifespan heterogeneity, Occupation arduousness, Health heterogeneity, Indexation

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
Green