Universal pension scheme and risk-taking

This article examines whether the existence of a universal pension scheme has any effect on a typical individual's willingness to take risks at a young age. The pension system will give the individual who is assumed to live for two periods a fixed amount in the second period regardless of his i...

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Veröffentlicht in:Applied economics letters 2015-01, Vol.22 (1), p.7-11
Hauptverfasser: Chen, Yao-Tung, Lan, Yuh-Ju, Hsu, Ker-Tah, Chen, Keng-Shen, Wang, Yu-Der
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Sprache:eng
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Zusammenfassung:This article examines whether the existence of a universal pension scheme has any effect on a typical individual's willingness to take risks at a young age. The pension system will give the individual who is assumed to live for two periods a fixed amount in the second period regardless of his initial choice between certain and uncertain income patterns. It is found that with a grant in place for everyone after retirement that satisfies the basic need of consumption in any part of life where the typical individual is more risk-averse, he will always accept the risky projects that at least make him indifferent between sure incomes and uncertain profits in the first period.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2014.881965