Welfare Implications of Net Social Security Wealth
نویسنده
چکیده
Real net social wealth (NSSW), the real present value of social security benefits received minus social security taxes paid, is frequently used as a direct proxy measure for the impact of a social security system on generation welfare. The present paper establishes to the contrary, for a class of overlapping generation economies, that NSSW can be simultaneously negatively correlated with welfare for every agent in every generation. More generally, the paper determines the extent to which social security is needed in these economies to ensure social optimality, and investigates the proper subset of economies for which NSSW and generation welfare exhibit positive correlation.
منابع مشابه
Policy Reforms , Housing , and Wealth Inequality ∗
I develop a quantitative, dynamic general equilibrium model of life cycle behavior to study the effects of several policy reforms on assets composition over the life cycle, wealth distribution and aggregate saving. Privatizing social security increases aggregate saving, decreases overall wealth inequality, and generates large welfare gain, especially for agents with high initial productivity. L...
متن کاملWealth Inequality and the Importance of Public
In recent years, the social policy discussion in Germany—but elsewhere as well—has been heavily dominated by the issue of income inequality and rising poverty risk rates. Yet very little research has been done on the personal wealth distribution to date, not least of all due to the severe lack of appropriate data. Using representative micro-data from the Socio-Economic Panel Study (SOEP), the G...
متن کاملAdverse Selection in the Annuity Market and the Role for Social Security∗
This paper studies the role of social security in providing annuity insurance. I calculate the welfare cost of adverse selection in the annuity market using a life cycle model in which individuals have private information about their mortality. I calibrate the model to the current U.S. social security replacement ratio, fraction of annuitized wealth and mortality heterogeneity in the Health and...
متن کاملGreen National Accounting : Why and How ?
The present paper gives an overview of the theory of green national accounting. Three purposes of green national accounting (measurement of welfare equivalent income, sustainable income, or net social profit) and two measures (Green NNP and wealth equivalent income) are considered. Under the assumption of no exogenous technological progress, Green NNP is shown to equal wealth equivalent income ...
متن کاملThe Impact of Medical and Nursing Home Expenses on Savings
We consider a life-cycle model with idiosyncratic risk in earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States we show that savings for old-age, out-of-pocket expenses account for 13.5 percent of aggregate wealth, half of which is due to nursing home expe...
متن کامل