Pension Economics

TY - BOOK

T1 - Pension Economics

AU - Andersen, Torben M.

N1 - Publisher Copyright: © Torben M. Andersen 2025.

PY - 2025/1/1

Y1 - 2025/1/1

N2 - A coherent introduction to the economics of pensions is provided to give the reader insights in the many objectives addressed by pension systems and the design possibilities available. The text offers an in-depth overview of the literature and its main insights and conclusions with sufficient rigor to understand the basic mechanisms, but without excessive technical details, focusing on the intuition and implications of the results. The pros and cons of different pension schemes are discussed from both an individual and societal perspective. It is analysed how differences in earnings, behavioural aspects, and market failures may motivate intervention in retirement savings on both equity and efficiency grounds. The distribution issue arises both within and between generations, and both are analysed. Specific focus is on how savings and retirement decisions are affected by various hazards that may appear over the life course, comprising both individual factors (including earnings and health/work capabilities) and economy-wide factors (including rates of return, fertility and longevity). The text also covers the macroeconomic implications of the pension system focussing on the impact of demographic changes. The political economy of pensions is introduced with specific emphasis on how the horizon of voters, intergenerational linkages, and the income distribution may affect support for tax-financed pensions. A common theme throughout the book is that in the design of pension systems there are many objectives and trade-offs to consider and pros and cons of the possible building blocks, and therefore there is no simple answer to what the best design is.

AB - A coherent introduction to the economics of pensions is provided to give the reader insights in the many objectives addressed by pension systems and the design possibilities available. The text offers an in-depth overview of the literature and its main insights and conclusions with sufficient rigor to understand the basic mechanisms, but without excessive technical details, focusing on the intuition and implications of the results. The pros and cons of different pension schemes are discussed from both an individual and societal perspective. It is analysed how differences in earnings, behavioural aspects, and market failures may motivate intervention in retirement savings on both equity and efficiency grounds. The distribution issue arises both within and between generations, and both are analysed. Specific focus is on how savings and retirement decisions are affected by various hazards that may appear over the life course, comprising both individual factors (including earnings and health/work capabilities) and economy-wide factors (including rates of return, fertility and longevity). The text also covers the macroeconomic implications of the pension system focussing on the impact of demographic changes. The political economy of pensions is introduced with specific emphasis on how the horizon of voters, intergenerational linkages, and the income distribution may affect support for tax-financed pensions. A common theme throughout the book is that in the design of pension systems there are many objectives and trade-offs to consider and pros and cons of the possible building blocks, and therefore there is no simple answer to what the best design is.

KW - Annuities

KW - Defined benefits

KW - Defined contributions

KW - Distribution

KW - Financial viability

KW - Funded pension schemes

KW - Incentives

KW - Insurance

KW - Retirement age

KW - Retirement savings

KW - Unfounded pension schemes

UR - https://www.scopus.com/pages/publications/105025188344

U2 - 10.1093/9780198953029.001.0001

DO - 10.1093/9780198953029.001.0001

M3 - Book

AN - SCOPUS:105025188344

SN - 9780198952985

BT - Pension Economics

PB - Oxford University Press

ER -