Temptation and social security in a dynastic framework
نویسندگان
چکیده
منابع مشابه
Temptation and Social Security in Dynastic Framework
We investigate the welfare implications of a pay as you go (PAYG) social security system in a dynastic framework in which agents have self-control problems. Unlike the previous studies, we incorporate altruism and temptation into our analysis. The presense of these two additional factors affects agents’ intertemporal decision problems in two opposite directions. That is, on the one hand agents ...
متن کاملTemptation and social security in a dynastic framework
We investigate welfare and aggregate implications of a pay as you go (PAYG) social security system in a dynastic framework in which agents have self-control problems. The presence of these two additional factors at the same time affects individuals’ intertemporal decision problems in two opposite directions. That is, on the one hand individuals prefer to save more because of their altruistic co...
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Much of the existing literature on social security has taken the extreme assumption that individuals have little or no altruism; this paper takes an opposite assumption that there is full two-sided altruism. When households insure members that belong to the same family line, privatizing social security can gain public support. In our benchmark model calibrated to the U.S. economy, privatization...
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I consider the saving and investment decisions of American and Italian consumers in a lifecycle model with temptation preferences. Comparing the choices with and without Social Security protection, I show that savings are postponed, less wealth is accumulated, and the portfolio share held in equities at retirement is larger with Social Security. Social Security distorts the decisions of agents ...
متن کاملOptimal social security in a dynastic model with investment externalities and endogenous fertility
This paper studies optimal pay-as-you-go social security with positive bequests and endogenous fertility. With an investment externality, a competitive solution without social security suffers from under-investment in capital and over-reproduction of population. We show that social security can improve welfare by reducing fertility and increasing capital intensity. We also illustrate numericall...
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ژورنال
عنوان ژورنال: European Economic Review
سال: 2012
ISSN: 0014-2921
DOI: 10.1016/j.euroecorev.2012.07.006