Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies.
This paper examines the risk-sharing properties of two major social security systems, the Pay-as-You-Go (PAYGO) Defined Benefit (DB) systems and the pre-funding systems, in both closed and open economies. An Overlapping Generations (OLG) model is constructed to formulate consumer’s saving and consum...
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sg-ntu-dr.10356-488672019-12-10T13:56:58Z Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. Wang, Jingyi. Ye, Honghai. School of Humanities and Social Sciences Walter Edgar Theseira DRNTU::Social sciences This paper examines the risk-sharing properties of two major social security systems, the Pay-as-You-Go (PAYGO) Defined Benefit (DB) systems and the pre-funding systems, in both closed and open economies. An Overlapping Generations (OLG) model is constructed to formulate consumer’s saving and consumption behaviors and examine the risk-sharing properties between two consecutive generations in a closed economy. Following which, we extend our analysis into an open economy context by introducing a static external economy. Our findings indicate that, in a closed economy, pre-funding systems generally perform poorly in demographic risk-sharing over generations. However, the risk-sharing properties in PAYGO systems are highly subjected to government policies. Moreover, an unanticipated demographic shock could possibly improve the intergenerational risk-sharing in pre-funding systems. Lastly, both social security systems function better in sharing demographic risks across generations in open economies than in closed economies. Bachelor of Arts 2012-05-10T04:47:27Z 2012-05-10T04:47:27Z 2012 2012 Final Year Project (FYP) http://hdl.handle.net/10356/48867 en Nanyang Technological University 41 p. application/pdf |
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DRNTU::Social sciences Wang, Jingyi. Ye, Honghai. Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
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This paper examines the risk-sharing properties of two major social security systems, the Pay-as-You-Go (PAYGO) Defined Benefit (DB) systems and the pre-funding systems, in both closed and open economies. An Overlapping Generations (OLG) model is constructed to formulate consumer’s saving and consumption behaviors and examine the risk-sharing properties between two consecutive generations in a closed economy. Following which, we extend our analysis into an open economy context by introducing a static external economy.
Our findings indicate that, in a closed economy, pre-funding systems generally perform poorly in demographic risk-sharing over generations. However, the risk-sharing properties in PAYGO systems are highly subjected to government policies. Moreover, an unanticipated demographic shock could possibly improve the intergenerational risk-sharing in pre-funding systems. Lastly, both social security systems function better in sharing demographic risks across generations in open economies than in closed economies. |
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School of Humanities and Social Sciences |
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School of Humanities and Social Sciences Wang, Jingyi. Ye, Honghai. |
format |
Final Year Project |
author |
Wang, Jingyi. Ye, Honghai. |
author_sort |
Wang, Jingyi. |
title |
Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
title_short |
Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
title_full |
Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
title_fullStr |
Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
title_full_unstemmed |
Intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
title_sort |
intergenerational demographic risk-sharing properties of current social security systems in closed economies and open economies. |
publishDate |
2012 |
url |
http://hdl.handle.net/10356/48867 |
_version_ |
1681038091022761984 |