Mixing Bismarck and Child Pension Systems: An Optimum Taxation Approach
Robert Fenge and
Jakob von Weizsäcker
No 1751, CESifo Working Paper Series from CESifo
Abstract:
The labor-leisure distortion of a pay-as-you-go pension system can be reduced through a stronger tax-benefit link or Bismarck pension system. Distortions of the fertility decision can be reduced through the introduction of a stronger child-benefit or child pension system. Within our optimal taxation framework, we find a Corlett-Hague result regarding the optimal mix of the two: if and only if children are more complementary to leisure should the taxbenefit link be given a positive weight at the expense of the child-benefit link. The model also allows us to examine the infertility insurance argument that may justify redistribution from families with children to those without implied by most pension systems. We find that the opposite redistribution, from the childless to those with children, would be efficient if individuals have low risk aversion. Redistribution in favor of the infertile would only be justified when risk aversion is high.
Keywords: pay-as-you-go pension; fertility; externality; Bismarck pension; optimal taxation (search for similar items in EconPapers)
JEL-codes: H23 H55 J13 J18 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)
Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1751.pdf (application/pdf)
Related works:
Journal Article: Mixing Bismarck and child pension systems: an optimum taxation approach (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1751
Access Statistics for this paper
More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().