The Outlines of a Possible Pension System Funded with Human Capital

The broadly used pay-as-you-go (PAYG) pension system is intrinsically wrong. essence of the problem that PAYG distributes yield raising children, i.e., human capital investment (which essentially contribution), in such a way it disregards extent to which individuals have contributed this, and even whether has occurred at all. This error can be corrected if we take contribution on an capital, as use this pay back costs expenses payer—overall those who paid these time. Accordingly, central question my study possible construct consistent based above foundations, how ideas may inserted into Diamond–Samuelson model. method was logical analysis construction theoretical mathematical results show public operates according different logic than today’s system, free from effects demographic fluctuations, does not motivate refusal will remain self-sufficient under all circumstances. achieves by presenting kind detail. Via suitable modification model, I succeeded showing am proposing increases willingness children up social optimum, contrast fully (but traditionally) funded systems. currently only exists theory regarded major innovation, naturally certain (although particularly extensive) antecedents. Its introduction could enable resolution contradictions existing systems also provide solution yet unsolved increasingly expensive regeneration such, its potential practical implications are immeasurable.