PL EN


2008 | 55 | 5 | 427-440
Article title

Reporting earnings and pension benefits: an elementary model

Title variants
Languages of publication
HU
Abstracts
EN
This paper analyses the interaction between reporting earnings and pension benefits, using a very simple, elementary model. Workers can be classified in three groups: 1. well-paid, reporting in full, 2. well-paid, reporting to a minimal extent (free-riders) and 3. poorly paid, reporting in full. In the basic version, it is assumed that free-riders save a significant proportion of their hidden earnings for their old age. Three pension systems are compared: 1. contributory, 2. contributory combined with a universal basic pension, and 3. contributory with means testing. The major result of the paper is that if free-riders are distinguishable and can be excluded, a means-tested system is welfare-superior to the basic system. The robustness of the observations can be checked by changing the assumptions of the basic model methodically. In a future model, the report and the saving are to be derived from individual optimization, and the system parameters will be set by maximizing the social-welfare function.
Year
Volume
55
Issue
5
Pages
427-440
Physical description
Document type
ARTICLE
Contributors
  • Andras Simonovits, no address given, contact the journal editor
References
Document Type
Publication order reference
Identifiers
CEJSH db identifier
10HUAAAA078621
YADDA identifier
bwmeta1.element.4a231f68-de23-3031-a161-60f5ebdc7d64
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