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When a municipality chooses whether to produce a service by its own work force or to acquire it from a private producer, it affects the funding of the earnings-related pension system of municipal sector employees, and that has repercussions on all other municipalities and also on the private sector pension system. We study how the financial sustainability of the two pension systems is affected by these interconnections and whether they distort the choices and lead to inefficient outcomes.
The study is carried out in cooperation with the Finnish Centre for Pensions and Keva by Jukka Lassila, Niku Määttänen ja Tarmo Valkonen. The project will be completed in the autumn 2012.
