Ondřej Schneider, Michal Ježek, Jan Houska (31. 8. 2004 - Zatím nepublikováno)

In this paper, we combine macro and microeconomic approaches to a pension reform. First, we modify an OLG model and estimate macroeconomic effects of a pension system switch from a pure PAYG to a mixed system. Second, we employ macroeconomic results in a microeconomic simulation in which we estimate individual welfare gains for various income groups in each cohort affected by the pension reform. We propose an unorthodox sequencing of the pension reform in which the pre-retirement generations would enter the reformed system first. This sequencing maintains the Pareto efficiency condition for all age cohorts, but it gives governments more flexibility in the reform process. [The paper in PDF format (500 k) can be open or downloaded here].