Underreported Earnings and Old-Age Pension: An Elementary Model

摘要: This paper analyzes the interconnections of underreported earnings, savings and oldage pension with help a most simple, elementary model. The workers can be divided into three groups: 1) well-paid who report their full 2) only minimum earnings (evaders) 3) poorly paid. We assume that evaders save significant part hidden for old age. compare systems equal size: (i) proportional, (ii) proportional plus basic (iii) means testing. Our major result is as follows: if recognized excluded, then means-tested system superior to system.