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The Pay-As-You-Go Pension System as a Fertility Insurance and Enforcement Device / Hans-Werner Sinn.
- Format:
- Book
- Author/Creator:
- Sinn, Hans-Werner.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w6610.
- NBER working paper series no. w6610
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1998.
- Summary:
- It is argued that a PAYGO system may have useful allocative functions in that it serves as an insurance against not having children and as an enforcement device for rotten kid' who are unwilling to pay their parents a pension. It is true that the system has amoral hazard effect in terms of reducing the investment in human capital, but, if it is run on a sufficiently small scale this effect will not strong enough to prevent a welfare improvement. If scale of the system is so large that parents bequeath some of their pensions to their children overdrawn and creates unnecessarily strong disincentives for human capital investment.
- Notes:
- Print version record
- June 1998.
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