Publication

Risk sharing and transition costs in the reform of pension systems in Europe

Miles, D., Timmermann, A., de Haan, J. & Pagano, M., Oct-1999, In : Economic Policy. 29, p. 252-286 35 p.

Research output: Contribution to journalArticleAcademicpeer-review

APA

Miles, D., Timmermann, A., de Haan, J., & Pagano, M. (1999). Risk sharing and transition costs in the reform of pension systems in Europe. Economic Policy, (29), 252-286.

Author

Miles, D ; Timmermann, A ; de Haan, J ; Pagano, M. / Risk sharing and transition costs in the reform of pension systems in Europe. In: Economic Policy. 1999 ; No. 29. pp. 252-286.

Harvard

Miles, D, Timmermann, A, de Haan, J & Pagano, M 1999, 'Risk sharing and transition costs in the reform of pension systems in Europe', Economic Policy, no. 29, pp. 252-286.

Standard

Risk sharing and transition costs in the reform of pension systems in Europe. / Miles, D; Timmermann, A; de Haan, J; Pagano, M.

In: Economic Policy, No. 29, 10.1999, p. 252-286.

Research output: Contribution to journalArticleAcademicpeer-review

Vancouver

Miles D, Timmermann A, de Haan J, Pagano M. Risk sharing and transition costs in the reform of pension systems in Europe. Economic Policy. 1999 Oct;(29):252-286.


BibTeX

@article{c5c0a4ff16404445baf728ac521dfcd8,
title = "Risk sharing and transition costs in the reform of pension systems in Europe",
abstract = "Unfunded pay-as-you-go state pension schemes are financially unsustainable in Europe as elsewhere. Proponents of reform argue that, by switching to a fully funded scheme that takes advantage of the high return on assets such as equities, the solvency of the state scheme could be restored at little or no financial burden to current taxpayers. We show that this is mistaken for two reasons.First, making the transition is itself costly. Unless this cost is substantially financed by debt, it will fall on current generations, who are therefore likely to oppose the reform. Second, potentially higher returns are accompanied by significantly higher risk, which we quantify. We explain how an insurance scheme could be designed to mitigate both risk and moral hazard.",
author = "D Miles and A Timmermann and {de Haan}, J and M Pagano",
year = "1999",
month = "10",
language = "English",
pages = "252--286",
journal = "Economic Policy",
issn = "0266-4658",
publisher = "Oxford University Press",
number = "29",

}

RIS

TY - JOUR

T1 - Risk sharing and transition costs in the reform of pension systems in Europe

AU - Miles, D

AU - Timmermann, A

AU - de Haan, J

AU - Pagano, M

PY - 1999/10

Y1 - 1999/10

N2 - Unfunded pay-as-you-go state pension schemes are financially unsustainable in Europe as elsewhere. Proponents of reform argue that, by switching to a fully funded scheme that takes advantage of the high return on assets such as equities, the solvency of the state scheme could be restored at little or no financial burden to current taxpayers. We show that this is mistaken for two reasons.First, making the transition is itself costly. Unless this cost is substantially financed by debt, it will fall on current generations, who are therefore likely to oppose the reform. Second, potentially higher returns are accompanied by significantly higher risk, which we quantify. We explain how an insurance scheme could be designed to mitigate both risk and moral hazard.

AB - Unfunded pay-as-you-go state pension schemes are financially unsustainable in Europe as elsewhere. Proponents of reform argue that, by switching to a fully funded scheme that takes advantage of the high return on assets such as equities, the solvency of the state scheme could be restored at little or no financial burden to current taxpayers. We show that this is mistaken for two reasons.First, making the transition is itself costly. Unless this cost is substantially financed by debt, it will fall on current generations, who are therefore likely to oppose the reform. Second, potentially higher returns are accompanied by significantly higher risk, which we quantify. We explain how an insurance scheme could be designed to mitigate both risk and moral hazard.

M3 - Article

SP - 252

EP - 286

JO - Economic Policy

JF - Economic Policy

SN - 0266-4658

IS - 29

ER -

ID: 3828499