Pensions and intergenerational risk-sharing in general equilibrium

Authors
Publication date 2009
Journal Economica
Volume | Issue number 76 | 302
Pages (from-to) 364-386
Number of pages 23
Organisations
  • Faculty of Economics and Business (FEB) - Amsterdam School of Economics Research Institute (ASE-RI)
Abstract We investigate intergenerational risk-sharing in two-pillar pension systems with a pay-as-you-go pillar and a funded pillar. The funded pension pillar can be either defined contribution or defined benefit. Only a defined-benefit scheme with an appropriate investment policy establishes optimal intergenerational risk-sharing. We show how the pension system affects capital markets in general and the equity premium in particular.

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