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Fair Pension Policies with Occupation-Specific Ageing

Author

Listed:
  • Volker Grossmann
  • Johannes Schünemann
  • Holger Strulik
Abstract
We study the optimal design of a fair public pension system in a multi-period overlapping generations model with occupation-specific morbidity and mortality that depends on the retirement age. The fairness constraint acts as institutional device ensuring that lifetime returns to contributions are equal across occupational groups. We consider group-specific replacement rates and a calculatory interest rate for early contributions as policy instruments. Calibrating the model to Germany, we find that the transition to optimal fair pension policies may induce early retirement of blue-collar workers and significantly raises their lifetime pension benefits and welfare. Aggregate welfare increases in all fair pension scenarios.

Suggested Citation

  • Volker Grossmann & Johannes Schünemann & Holger Strulik, 2024. "Fair Pension Policies with Occupation-Specific Ageing," The Economic Journal, Royal Economic Society, vol. 134(663), pages 2835-2875.
    • Handle: RePEc:oup:econjl:v:134:y:2024:i:663:p:2835-2875.
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    File URL: http://hdl.handle.net/10.1093/ej/ueae038
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    Cited by:

    1. Holger Strulik & Volker Grossmann, 2022. "Life Cycle Economics with Infectious and Chronic Diseases," CESifo Working Paper Series 10141, CESifo.
    2. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2023. "Anticipation of deteriorating health and information avoidance," Journal of Health Economics, Elsevier, vol. 89(C).
    3. Schünemann, Johannes & Strulik, Holger & Trimborn, Timo, 2022. "Optimal demand for medical and long-term care," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    4. Ana Lucia Abeliansky & Holger Strulik, 2023. "Health and aging before and after retirement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(4), pages 2825-2855, October.
    5. Strulik, Holger & Grossmann, Volker, 2024. "The economics of aging with infectious and chronic diseases," Economics & Human Biology, Elsevier, vol. 52(C).

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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