scholarly journals LONGEVITY, GROWTH, AND INTERGENERATIONAL EQUITY: THE DETERMINISTIC CASE

2015 ◽  
Vol 20 (4) ◽  
pp. 985-1021 ◽  
Author(s):  
Torben M. Andersen ◽  
Marias H. Gestsson
Keyword(s):  
Overlapping Generations ◽  
Well Being ◽  
Intergenerational Equity ◽  
Future Generations ◽  
Burden Sharing ◽  
Retirement Age ◽  
Overlapping Generations Model ◽  
Policy Debates ◽  
Age Dependency Ratio ◽  
Policy Proposals

Challenges raised by aging (increasing longevity) have prompted policy debates featuring policy proposals justified by reference to some notion of intergenerational equity. However, very different policies ranging from presavings to indexation of retirement ages have been justified in this way. We develop an overlapping-generations model in continuous time that encompasses different generations with different mortality rates and thus longevity. Allowing for trend increases in both longevity and productivity, we address the normative issue of intergenerational equity under a utilitarian criterion when future generations are better off in terms of both material and nonmaterial well-being. Increases in productivity and longevity are shown to have very different implications for intergenerational distribution. Further, the socially optimal retirement age, dependency ratio, and intergenerational burden sharing in the case of a trend increase in longevity are shown to depend on how individuals' utility for time/leisure is affected by age and longevity.

scholarly journals Sharing High Growth across Generations: Pensions and Demographic Transition in China

2015 ◽  
Vol 7 (2) ◽  
pp. 1-39 ◽  
Author(s):  
Zheng Song ◽  
Kjetil Storesletten ◽  
Yikai Wang ◽  
Fabrizio Zilibotti
Keyword(s):  
Emerging Economies ◽  
Overlapping Generations ◽  
Current System ◽  
High Growth ◽  
Future Generations ◽  
Financial Sustainability ◽  
Welfare Gains ◽  
Overlapping Generations Model ◽  
Intergenerational Redistribution ◽  
Endogenous Labor

We analyze intergenerational redistribution in emerging economies with the aid of an overlapping generations model with endogenous labor supply. Growth is initially high but declines over time. A version of the model calibrated to China is used to analyze the welfare effects of alternative pension reforms. Although a reform of the current system is necessary to achieve financial sustainability, delaying its implementation implies large welfare gains for the (poorer) current generations, imposing only small costs on (richer) future generations. In contrast, a fully funded reform harms current generations, with small gains to future generations. (JEL E13, H55, J11, O11, O15, P24, P36)

MORTALITY DECLINE, RETIREMENT AGE, AND AGGREGATE SAVINGS

2014 ◽  
Vol 20 (3) ◽  
pp. 715-736 ◽  
Author(s):  
Yanyou Chen ◽  
Sau-Him Paul Lau
Keyword(s):  
Life Expectancy ◽  
Overlapping Generations ◽  
Survival Function ◽  
Mortality Decline ◽  
Retirement Age ◽  
Overlapping Generations Model ◽  
Future Behavior ◽  
Life Expectancy Increase ◽  
One Year ◽  
Endogenous Retirement

We use an overlapping-generations model with endogenous retirement and saving to study the trade-off between saving and retirement age in response to mortality decline. When life expectancy increases by one year, people delay retirement by about four months. With this magnitude of delay in retirement age, the percentage of lifetime spent in working decreases, and people have to save more for postretirement years. Neither the pure form of sole adjustment through savings nor the proportionality hypothesis is consistent with our results, but the proportionality hypothesis is a better rule of thumb in predicting future behavior. Our choice of the modified Boucekkine et al. (2002) survival function gives a convenient one-to-one correspondence between life expectancy increase and a change in the survival parameter.

scholarly journals Intergenerational leadership: an extension of contemporary corporate social responsibility models

2018 ◽  
Vol 2 (1) ◽  
pp. 7-17 ◽  
Author(s):  
Julia Puaschunder
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Intergenerational Transfers ◽  
Well Being ◽  
Intergenerational Equity ◽  
Future Generations ◽  
Future Research ◽  
Intergenerational Leadership ◽  
Corporate Social ◽  
The Impact

The following paper promotes the idea of intergenerational equity in the corporate world as Corporate Social Responsibility (CSR) means to coordinating the common goods and imbuing economic stability beyond a purely governmental approach. The outlined intergenerational equity constraints herald a call for intergenerational equity – the fairness to provide an at least as favorable standard of living as enjoyed today. As an implicit contract and transfer between living and future generations, intergenerational equity avoids discriminating against future generations and ensures future infrastructure, equal opportunities over time and constant access to social welfare for the youth. Intergenerational equity grants a favorable climate between generations and alleviates frictions arising from the negative impacts of intergenerational inequity. Outlining some of the causes of the current intergenerational imbalances regarding climate stability and overindebtedness prepares for recommendations on how to implement intergenerational transfers. The impact of intergenerational transfers on societal well-being is discussed. Future research avenues comprise of investigating situational factors influencing intergenerational leadership in the international arena in order to advance the idea of the private sector aiding on intergenerational imbalances and tackling the most pressing contemporary challenges of humankind.

scholarly journals Pension policies in a model with endogenous fertility

2018 ◽  
Vol 19 (1) ◽  
pp. 109-125 ◽  
Author(s):  
GIAM PIETRO CIPRIANI ◽  
FRANCESCO PASCUCCI
Keyword(s):  
Overlapping Generations ◽  
Pension System ◽  
Retirement Age ◽  
Endogenous Fertility ◽  
Contribution Rate ◽  
Negative Effects ◽  
Overlapping Generations Model ◽  
The Social ◽  
Policy Measures ◽  
Set Up

AbstractWe set up an overlapping-generations model with endogenous fertility to study pensions policies in an ageing economy. We show that an increasing life expectancy may not be detrimental for the economy or the pension system itself. On the other hand, conventional policy measures, such as increasing the retirement age or changing the social security contribution rate could have undesired general equilibrium effects. In particular, both policies decrease capital per worker and might have negative effects on the fertility rate, thus exacerbating population ageing.

Intergenerational Equity and Responsibility for Future Generations

2018 ◽  
Author(s):  
Kotaro Suzumura
Keyword(s):  
Global Warming ◽  
Equal Opportunity ◽  
Voting Rights ◽  
Well Being ◽  
Intergenerational Equity ◽  
Future Generations ◽  
Large Share ◽  
The Past ◽  
Present Generation ◽  
The Future

Why should the present generation be held responsible for the sustainable well-being of future generations, especially since past generations must bear some large share of the cause of global warming? This chapter describes the principle that all generations irrespective of when they emerged in the past or will emerge in the future should have equal opportunity to lead worthwhile lives of their choice. It assesses several alternatives including assigning voting rights to the very young and setting aside these alternatives as on balance unsatisfactory or unworkable. On the principle of responsibility and compensation, the chapter proposes that the present generation must either abate global warming or compensate future generations. It explains and defends why this one-sided, external, and irrevocable choice of the present generation is the only sensible and moral alternative for addressing intergenerational equity.

scholarly journals POSTPONING RETIREMENT AND SOCIAL SECURITY IN A TWO-SECTOR MODEL

2021 ◽  
pp. 1-19
Author(s):  
PARTHA SEN
Keyword(s):  
Steady State ◽  
Social Security ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Retirement Age ◽  
Overlapping Generations Model ◽  
Payroll Tax ◽  
Tax Rate ◽  
Sector Model ◽  
State Capital

Pay-as-you-go social security schemes in the Organisation for Economic Co-operation and Development countries are facing solvency problems, as people are living longer and birth rates have declined. Postponing the full retirement age (FRA), when retirees are entitled to full pension, has been proposed as a solution. This effectively lowers the payroll tax rate since pension is paid only in the post-FRA period. In a two-period two-sector overlapping generations model, I show that this shift lowers savings (because a part of the expected old-age income is consumed in the first period), as employment increases. In the transition to the new steady state, capital is decumulated and the wage rate falls. Contrast this with a reduction of the payroll tax rate where the initial old suffer reduced consumption, but the young have higher post-tax income and this spurs capital accumulation.

scholarly journals We – today’s and tomorrow’s – people of the united world: rethinking capitalism for intergenerational justice in the fin-de-millénaire

2017 ◽  
Vol 1 (2) ◽  
pp. 30-35 ◽  
Author(s):  
Julia M. Puaschunder
Keyword(s):  
Overlapping Generations ◽  
Intergenerational Equity ◽  
Burden Sharing ◽  
Western World ◽  
Upward Movement ◽  
Intergenerational Justice ◽  
Economic Market ◽  
Socially Responsible ◽  
Nation States ◽  
Justice Theories

Globalization leveraged pressure on contemporary society. Today’s most pressing social dilemmas regarding climate change, overindebtedness and aging Western world populations demand rethinking capitalism. Understanding the bounds of capitalism to avoid ethical downfalls beyond the control of singular nation states infringing on intergenerational equity – the fairness to provide an at least as favorable standard of living to future generations as enjoyed today – has become a blatant demand. This article captures the human natural drive towards intergenerational fairness in order to retrieve information on how to implement intergenerational justice. Based on the idea of intergenerational equity as a natural behavioral law, the following paper theoretically outlines the current societal demand for eternal equity and proposes intergenerational justice theories. Intertemporal connectedness and interaction of overlapping generations enables intergenerational benefits transfers and burden sharing. Social mobility within networks comprised of different generations is enhanced through social upward movement opportunities. In addition, meritocracy helps alleviate intergenerational inequality. Describing intergenerational care as something natural that has been practiced ever since helps spearhead interdisciplinary endeavours to solve contemporary predicaments between overlapping generations. Exploring intergenerational opportunities is targeted at innovatively guiding the implementation of justice over time and between generations. Strengthening financial social responsibility, social welfare and environmental protection through future-oriented and socially responsible economic market approaches of capitalism in the 21st century is aimed at alleviating predictable economic, social and environmental crises to ensure a future sustainable humankind for this generation and the following.

Beyond GDP: The Quest for a Measure of Social Welfare. Part I

2012 ◽  
pp. 67-93 ◽  
Author(s):  
M. Fleurbaey
Keyword(s):  
Economic Theory ◽  
Social Welfare ◽  
Well Being ◽  
National Product ◽  
Future Generations ◽  
Modern Economic ◽  
Aggregate Wealth ◽  
Net National Product ◽  
Sustainability Policy ◽  
Beyond Gdp

The first part of the paper is devoted to the monetary indicators of social welfare. It is shown which methods of quantitative estimating the aggregate wealth and well-being are available in the modern economic theory apart from the traditional GDP measure. The limitations of the methods are also discussed. The author shows which measures of welfare are adequate in the dynamic context: he considers the problems of intertemporal welfare analysis using the Net National Product (NNP) for the sustainability policy and in the context of concern for well-being of the future generations.

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