We examine the possibility of a Pareto-improving pay-as-you-go social security system, using an ex-ante welfare criterion. Our objective is to identify the conditions under which a suitably designed pay-as-you-go social security system is welfare improving, when markets are complete and...

The paper derives conditions for ex ante efficient intergenerational risk sharing in overlapping generations models. I show how the efficiency of a fiscal policy can be evaluated without distributional judgments, I derive efficiency conditions, and then examine specific models. For models with...

In all major industrialized countries the population is aging over time, reducing the fraction of the population in working age. Consequently labor is expected to be scarce, relative to capital, with an ensuing decline in real returns on capital and increases in real wages. This paper employs a...

The goal of this paper is to determine the effects of different social security regimes on job search. A less generous pension system induces higher savings across the life cycle and makes agents wealthier and thus more reluctant to accept low wage offers. On the other hand, as the social...

We investigate why social security arose when it did in the United States to replace family based old-age care. We hypothesize that increases in life-expectancy (conditional on reaching adulthood) interrupted the traditional familial transfer of land on the farm and also led to crowding of that...

Financing retirement benefits is probably the most significant fiscal challenge that governments in industrial economies will be facing in the next few decades. Social security reform has therefore become an important public policy issue for many countries and various reform proposals have been...

We analyze the sustainability of intergenerational transfers in politico-economic equilibrium. We argue that these transfers naturally arise in a Markov perfect equilibrium in the fundamental state variables. In contrast to earlier literature, our explanation does not resort to altruism,...