Summary

Abstract

The purpose of the present book has been to highlight the role of public pensions in a growing economy. The book has analyzed the impact of an unfunded public pension scheme on aggregate productivity growth and efficiency, it has considered the political forces behind public pension legislation, and it has developed and discussed elements of public pension design respectively reform. In contrast to earlier contributions to this subject, the present analysis has been based on the possibility of endogenously evolving economic growth. This allowed to study some ramifications of public pension policies that have found little attention so far. First, the present work has pointed to an allocative role of public intergenerational redistribution from young to old generations that is exclusively linked to the occurrence of endogenous long-run growth. Second, the analysis has revealed that in an endogenous growth economy public intergenerational redistribution creates a conflict between living and future generations. This conflict affects decisions on intrafamily voluntary transfers and the number of children and shapes the process of public pension legislation.