Social Security: Universal vs Earnings-Dependent Benets
نویسنده
چکیده
In this paper, I compare the welfare implications of implementing Bismarckian and Beveridgean social security systems. I rst judge a social security system with universal bene ts against one with earningsdependent bene ts that provides the same level of bene ts. Surprisingly, I nd that agents can be better o¤ with the implementation of a system with universal bene ts both in the short and in the long-run. I then allow agents to choose the replacement rates in a democratic process and nd that future agents and the current young are worse o¤ when bene ts are earnings-dependent than when they are universal. JEL Classi cation: E62, H55. Keywords: social security, universal bene ts, earnings-dependent bene ts, voting, welfare. Department of Economics, Purnell Hall Room 315, University of Delaware, Newark, DE, 19716, Phone: (302) 831-1914, Fax: (302) 831-6968, e-mail: [email protected].
منابع مشابه
Social Security: Universal vs. Earnings-Dependent Benefits
I compare the welfare implications of implementing Bismarckian and Beveridgean social security systems. In an overlapping generations environment with intragenerational homogeneity, agents can be better off with a system with universal benefits than with a comparable system with earningsdependent benefits because the latter generates a stronger decrease in net wages. Once I allow for intragener...
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