Pay-as-you-go social security in a changing environment

"In this paper, we examine the optimal pay-as-you-go social security scheme which reallocates resources across generations in a changing environment, that is, with fluctuations in population growth rates and in productivity levels. We use an overlapping generations model along with a social welfare function consisting of the sum of generational utilities either unweighted or weighted by population size and a discount factor. We show how intergenerational resource sharing can be used to improve social welfare even though the extent of intergenerational redistribution is hampered by payroll tax deadweight losses...." The authors also consider the effects of an economy's openness on resource sharing. The geographical focus is on developed countries.