"Optimal Pension Systems with Simple Instruments", American Economic Review, 103(3) P&P: 502-507, 2013
We analyze optimal pension systems relying on
simple policy instruments in a lifecycle environment that admits endogenous decisions
of how much to work as well as when to retire. The optimality in this context
means the highest welfare that can be achieved within a restricted set of
instruments, while keeping the total cost of the pension system unchanged.
The policy instruments we consider are the optimized retirement benefit
functions modeled after a stylized version of the current US Social Security.