chConsumptionsmoothingOldagepensions(福利经济学牛津大学,Barr).pptVIP

Chapter 9: Consumption smoothing: Old age pensions Organization of the chapter 1. Introduction and institutions 2. Methods of organizing pensions 3. Efficiency arguments for state intervention 4. Social justice 5. Assessment of old-age pensions 1. Introduction and institutions The purpose of pensions Poverty relief Insurance Consumption smoothing The state pension scheme Private pension schemes Occupational Personal 2 Ways of organising pensions 2.1. The logic of the issue 2.2. Funded schemes 2.3. Pay-as-you-go schemes 2.4. Pros and cons Methods of organising pensions Store current production Build a claim to future production Pay-as-You-Go pensions, usually organised by the state, are paid out of current tax revenues Funded pensions are paid out of an accumulated fund Different types of funded schemes Defined benefit (e.g. final salary schemes) Defined contribution Key point: funded and PAYG are simply methods for organising claims on future production Some advantages of PAYG schemes Cope well with inflation Allow pensioners to share in post-retirement economic growth Allow a full pension to be paid immediately Some disadvantages of funded schemes Vulnerable to unanticipated post-retirement inflation Do not allow pensioners to share in post-retirement economic growth It takes a long time to build up rights to a full pension A problem with PAYG Effects of ‘blips’ in the birth rate 3. Efficiency arguments for state intervention 3.1. Public-versus-private provision Private pensions: there are two sets of risks Probability of age at death (the life expectancy risk) The inflation risk 3.2 Addressing the demographic problem Static output: effects of demographic change on funded pensions Money accumulation: desired pensioner consumption exceeds desired saving by workers. Excess demand in the goods market causes price inflation, reducing the purchasing power of annuities. Financial asset accumulation: desired asset sales by pensioners exceeds desired purchase