Social Security Reform with Impure Intergenerational Altruism∗
نویسنده
چکیده
This paper studies the long-run aggregate and welfare effects of eliminating Social Security in a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by voluntary and accidental bequests. Social security in this model with impure altruism has a smaller effect on capital accumulation than in a pure life-cycle model, a bigger effect than in a model with two-sided altruism. The welfare gain of eliminating Social Security system under impure altruism is smaller than in a pure life-cycle model, and bigger than in a model with two-sided altruism.
منابع مشابه
Childcare Support and Social Security Reform
Based on a simple overlapping generations model with endogenous fertility, we show that the effectiveness of childcare support and social security reform depends much on the openness of the economy, altruism, and initial fertility. For example, introducing a child allowance, which is often expected to mitigate demographic pressures, might be ineffective in a closed economy. Downsizing a social ...
متن کاملAnyone for Social Security Reform?
A reform of a pay-as-you-go social security makes the pensioners worse off and the working generations better off in the period of the reform (in a dynamically efficient economy without altruism). The observed reluctance across all age groups to support such reforms is usually explained by the insurance properties of these schemes. I propose an alternative in a two sector setting. Since the old...
متن کاملSocial Security Reform and Financial Markets
Social Security is in trouble. With declining population growth and rising life expectancy, the cost of Social Security benefits is rising relative to payroll tax revenues. As a result, the Social Security retirement fund is expected to run out around 2030.1 Recently, the 1994–1996 Advisory Council on Social Security (1997) proposed three different plans to address the problem. Interestingly, a...
متن کاملElimination of Social Security in a Dynastic Framework
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...
متن کاملImpure Altruism and Impure Selfishness: Online Appendix
We provide an extention of GU model that incorporates a decision maker who is averse to inequality of allocations among other agents. We also provide a detaled discussion on the experiments on dictator games with an exit option.
متن کامل