Should Old-Age Benefits Be Earnings-Tested?

We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals’ expected lifetime utility, whenever other taxes are taken into account. Moreover, it also lowers the realized lifetime utilities of those at the bottom of the lifetime utility distribution.

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Year of publication:	2007-02
Authors:	Määttänen, Niku ; Poutvaara, Panu
Institutions:	Institute for the Study of Labor (IZA)
Subject:	social security \| retirement \| means-testing

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Extent:	application/pdf
Series:	IZA Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2616 29 pages
Classification:	H55 - Social Security and Public Pensions ; J26 - Retirement; Retirement Policies ; C68 - Computable General Equilibrium Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005763479