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Social Security trust fund portfolio diversification to include some equities reduces the equity premium by raising the safe real interest rate. This requires changes in taxes. Under the hypothesis of constant marginal returns to risky investments, trust fund diversification lowers the price of...
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There are many sources of political risk to public provision of pensions. This paper analyzes legislation to alter the …
Persistent link: https://www.econbiz.de/10012783964
This paper focuses on Social Security benefit claiming behavior, a take-up decision that has been ignored in the previous literature. Using financial calculations and simulations based on an expected utility maximization model, we show that delaying benefit claim for a period of time after...
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The largest entitlement program in the United States today is the Social Security program (SS). We provide an overview of the interaction between the SS system and retirement behavior. We begin by documenting historical trends in labor force participation and program receipt, and contemporaneous...
Persistent link: https://www.econbiz.de/10013214595
In Chile, all covered workers must place 10% of monthly earnings in a savings account with a highly regulated … year (for 1991) which is 2.94% of average taxable earnings. This is close to 30% of the 10% mandatory savings rate. The … pensions in the U.S. However, it compares unfavorably with administrative costs in well-run unified government managed systems …
Persistent link: https://www.econbiz.de/10013230785
The President's Commission to Strengthen Social Security proposed three reform plans. Two, analyzed here, restore actuarial balance in the absence of individual accounts. One achieves this balance solely through benefit reductions. The other uses new dedicated revenue to cover one-third of the...
Persistent link: https://www.econbiz.de/10013228718