Estimating saving and fertility simultaneously by the VAR method, we find that social security coverage has a positive effect on household saving, and a negative effect on fertility. In Germany, as in other countries where the hypothesis was tested, social security is thus good for growth. A...

The statutory pension system is the most important source of income for senior citizens in Germany. Due to increasing disruptions in employment biographies since the 1970s and due to the mass unemployment in eastern Germany since the 1990s, there is a growing fear of postretirement poverty in...

This study analyzes the effect of immigration on the pay-as-you-go social security system by incorporating the costs of assimilation. Owing to the costs, the net benefit for the natives by admitting immigrants is not always positive; it increases with the number of immigrants and decreases with...

We compare a social security system where people can retire at an age of their own choice with one in which there is a legal retirement age elected through a majority voting process. We show that individuals prefer a legal retirement age higher than the one they would choose in the flexible...

Adopting a portfolio choice approach to pension design, we derive illuminating closed form solutions for optimal pay-as-you-go social security programs. We demonstrate that the nature of the implied risk-sharing effects and their magnitudes are sensitive to the stochastic specification of...

This paper uses generational accounting to assess the fiscal impacts of Korean reunification. Our findings suggest that early reunification will result in a large increase in the fiscal burden for most current and future generations of South Koreans. The Korean reunification's fiscal impact...

In an occupational choice framework individuals can either become entrepreneurs (risky income) or employed workers (safe income). Their choice is affected by the design of the pension system which discriminates between entrepreneurs and workers. We explore the comparative statics of several...

This paper considers the tax evasion decision when taxes constitute contributions to the financing of social insurance programs, such as un employment insurance. We call this evasion contribution evasion and establish that critical differences exist between contribution evasion and tax evasion,...

We assess the political support for parametric reforms of the pay-as-you-go pension system following a drop in the fertility rate. Using a continuous-time overlapping-generations model, we argue that reforms that consist in cutting pension benefits or increasing the retirement age are likely to...

This paper examines the growth effects of an increase of capital income taxes if the additional revenue is devoted to cutting wage-related social security contributions to reduce unemployment. The analysis is carried out in an overlapping-generations model with endogenous growth, unemployment,...