Simonovits, András (2015) Socially optimal contribution rate and cap in a proportional (DC) pension system. PORTUGUESE ECONOMIC JOURNAL, 14 (1-3). pp. 45-63. ISSN 1617-982X
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Abstract
In our model, the government operates a mandatory proportional (DC) pension system to substitute for the low life-cycle savings of the lower-paid myopic workers, while maintaining the incentives of the higher-paid far-sighted ones in contributing to the system. The introduction of an appropriate cap on pension contribution (or its base)—excluding the earnings above the cap from the contribution base—raises the optimal contribution rate, helping more the lower-paid myopic workers and reserving enough room for the saving of higher-paid far-sighted ones. The social welfare is almost independent of the cap in a relatively wide interval but the maximal welfare is higher than the capless welfare by 0.3–4.5 %. © 2015, ISEG.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Proportional (DC) pensions; Maximum for taxable earnings; Contribution rate; Contribution cap |
| Subjects: | H Social Sciences / társadalomtudományok > HD Industries. Land use. Labor / ipar, földhasználat, munkaügy > HD3 Labor / munkaügy > HD32 Labour economics / munkagazdaságtan H Social Sciences / társadalomtudományok > HD Industries. Land use. Labor / ipar, földhasználat, munkaügy > HD3 Labor / munkaügy > HD34 Salaries / bérek |
| SWORD Depositor: | MTMT SWORD |
| Depositing User: | MTMT SWORD |
| Date Deposited: | 07 Jun 2016 11:50 |
| Last Modified: | 07 Jun 2016 11:50 |
| URI: | http://real.mtak.hu/id/eprint/35839 |
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