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Public pension systems and distortions of intra-EU mobility: the Lodge Test*

Published online by Cambridge University Press:  27 January 2009

ROBERT FENGE  and
JAKOB VON WEIZSÄCKER
ROBERT FENGE
Affiliation:
University of Rostock, CESifo
JAKOB VON WEIZSÄCKER
Affiliation:
BRUEGEL, CESifo
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Abstract

In this paper, we analyse how national public pension systems can distort intra-EU movements of workers despite the existing totalization/proratization agreement. As a benchmark test, we propose the ‘Lodge Test’ of mobility neutrality: Two identical individuals who swap countries and jobs should receive the same pension claims in either of the two pension systems compared to a situation where each would have stayed at home. Using the Lodge Test, we identify those features of national pension formulae that are systematically mobility distorting and discuss possible remedies.

Type
Articles
Information
Journal of Pension Economics & Finance , Volume 9 , Issue 2 , April 2010 , pp. 263 - 275
Copyright
Copyright © Cambridge University Press 2009

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