George Kudrna, Chung Tran and Alan Woodland
A means-tested pension system has a distinct feature that tailors the level of pension benefits according to individual status. In the context of population aging with widening gaps in life expectancies, this feature generates an automatic adjustment mechanism that mitigates the pressing fiscal cost of an old-age public pension program (fiscal stabilization device) and redistributes pension benefits to those in need with shorter life expectancies.
Keywords: Population Ageing, Sustainability, Social Security, Means Testing, Redistribution, Automatic Stabilizer, Overlapping Generations, Dynamic General Equilibrium.
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