Title:
The effects of uncertainties in the pension system on economic welfare
Authors:
- Andras Oliver Nemeth
- Eszter Szabo-Bakos
Published in:
(2023). ECMS 2023, 37th Proceedings
Edited by: Enrico Vicario, Romeo Bandinelli, Virginia Fani, Michele Mastroianni, European Council for Modelling and Simulation.
DOI: http://doi.org/10.7148/2023
ISSN: 2522-2422 (ONLINE)
ISSN: 2522-2414 (PRINT)
ISSN: 2522-2430 (CD-ROM)
ISBN: 978-3-937436-80-7
ISBN: 978-3-937436-79-1 (CD) Communications of the ECMS Volume 37, Issue 1, June 2023, Florence, Italy June 20th – June 23rd, 2023
DOI:
https://doi.org/10.7148/2023-0071
Citation format:
Andras oliver nemeth, Eszter szabo-bakos (2023). The effects of uncertainties in the pension system on economic welfare, ECMS 2023, Proceedings Edited by: Enrico Vicario, Romeo Bandinelli, Virginia Fani, Michele Mastroianni, European Council for Modelling and Simulation. doi:10.7148/2023-0071
Abstract:
We examine the welfare effects of uncertainty caused by the possibility of changes in the parameters of the pension system by comparing how the steady states of our OLG model differ if the consumers are aware of a changed parameter at the beginning of the first period of their life (i.e., when they start working), or only at the beginning of the second period. Our analysis includes three policy changes (increased retirement age, increased social security contribution, decreased replacement ratio), and in all three cases we find that a sudden, unexpected change decreases the lifetime utility of the representative consumer compared to a pre-announced changed.
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