Unfunded Pensions and Endogenous Labor Supply
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A classic result in dynamic public economics states that there is no welfare rationale for pay-as-you-go (PAYG) pensions in a dynamically efficient overlapping-generations economy with exogenous labor supply. Parenthetically, a welfare justification for PAYG pensions exists if the economy is dynamically inefficient. Under the sufficient condition that the old be no less risk-averse than the young, both these results extend to an economy with endogenous labor supply.
Cambridge University Press
Andersen, Torben M. and Bhattacharya, Joydeep, "Unfunded Pensions and Endogenous Labor Supply" (2013). Economics Publications. 601.