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...

This paper extends the Diamond overlapping-generations model with pay-as-you-go social security by allowing for variable retirement age and for distortionary taxation of earnings and interest income. The tax rates are shown to depend on whether or not debt policy is available, and on the...

This paper studies human-capital formation, labor-supply, and retirement decisions associated with four alternative regimes of social security. We implement a theoretical model with overlapping generations of households and two different ability types within each generation. We find that with a...

Generational Accounting is only a shortcut to a general equilibrium analysis because it is assumed that individual decisions are unaffected by policy reforms. Nonetheless only two studies examine the accuracy of Generational Accounting, but Fehr and Kotlikoff (1996) consider changes in...

The paper examines the long-term implications of various reform options for retirement entry decisions and the actual retirement age of older workers. It focuses on the changes in pension legislation since 1992 and the reform options discussed by the German Social Security Reform Commission...

The paper aims to assess tax-favored retirement accounts in a general-equilibrium overlapping-generations economy with idiosyncratic income risk and borrowing constraints. Our simulations indicate that tax-favored retirement accounts as implemented in many OECD countries will have a significant...

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,...