How to Pool Risks Across Generations: The Case for Collective Pensions

How to Pool Risks across Generations argues for the collective provision of pensions on fair terms of social cooperation, pooling risks across space and time. It opens with an investigation of the longevity and investment risk of a single individual on a desert island and builds up to increasingly collective forms of pension provision. A collective pension scheme is justified as a social union of social unions, forming an enduring corporate body that involves reciprocity between individuals. It remains evergreen as the average age of members remains relatively unchanged, allowing for smooth risks indefinitely across and within generations.

Format: Hardback
Length: 128 pages
Publication date: 27 June 2023
Publisher: Oxford University Press

The book "How to Pool Risks across Generations" makes a compelling argument for the collective provision of pensions, on fair terms of social cooperation. Through the insurance of a mutual association that spans society and multiple generations, we share one another's fates by pooling risks across both space and time. Resources are not merely transferred between different individuals but also within the potential future lives of each person: from one's more fortunate to one's less fortunate future selves. The book begins with an investigation into the longevity and investment risk that an individual on a desert island would face in providing for her old age. From this atomistic starting point, it builds up, within and across the chapters, to increasingly collective forms of pension provision. By joining together, we can tame the risks we would face as individuals, each with our own private pension pot.

A collective pension can be justified as a social union of social unions: an enduring corporate body formed by agreements to pool risks, in a manner that involves reciprocity between the various individuals that constitute the collective. Despite the fact that all individuals age and die, a collective pension scheme remains evergreen, as the average age of members remains relatively unchanged, through the influx of new members to replace those who retire. This allows for the indefinite smoothing of risks across and within generations, to the mutual advantage of each.

Weight: 264g
Dimension: 223 x 145 x 14 (mm)
ISBN-13: 9780198885962