ESCP Europe

This book gives an extensive nontechnical explanation of the economics of pension design in 3 arguments : pension systems have multiple objectives like consumption smoothing, insurance, poverty relief, and redistribution ; good analysis should be framed in a second-best context, simple economic models are a bad guide to policy design in a world with imperfect information and decision-making, incomplete markets and taxation ; any choice of pension system has risk-sharing and distributional consequences. The authors' analysis includes labor markets, capital markets, risk sharing, and gender and family, with comparison of pay-as-you-go and funded systems, recognizing that the suitable level of funding differs by country.