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Political Risk Versus Market Risk in Social Security
Shoven, John B. - 2010
from risk. This study develops the concept of %u201Cpolitical risk%u201D as the possibility that some future legislature … in the demographic and macroeconomic variables that support it. Thus there is a %u201Cpolitical risk%u201D to … participants that might be compared to the %u201Cmarket risk%u201D in a personal accounts retirement scheme. In this paper, we …
Persistent link: https://www.econbiz.de/10012761674
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Individual Risk and Intergenerational Risk Sharing in an Investment-Based Social Security Program
Feldstein, Martin S.; Ranguelova, Elena - 2021
This paper examines the risk aspects of a fully phased-in investment-based defined contribution Social Security plan … system. A higher saving rate provides a cushion' that reduces the risk of unacceptably low benefits. For example, saving 6 … annuity exceeds 92 percent of the benchmark benefit. We also study a modified plan in which retirees face no risk of …
Persistent link: https://www.econbiz.de/10013213068
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Political Parties Do Matter in U.S. Cities ... For Their Unfunded Pensions
Dippel, Christian - 2019
This paper studies the biggest fiscal challenge currently facing many U.S. cities, namely public-sector pension obligations. Employing a regression discontinuity design (RDD), it tests whether the mayor's party impacts a city's public-sector pensions. Pension benefits are shown to grow faster...
Persistent link: https://www.econbiz.de/10012891340
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Uncertainty, Welfare Cost, and the 'Adaptability' of U.S. Corporate Taxes
Fullerton, Don; Lyon, Andrew B.; Rosen, Richard J. - 2021
Alternative corporate tax systems differ in their ability to adapt to changes in the rate of inflation. Absent complete indexing of depreciation allowances, a tax system may use the expected inflation rate to set accelerated depreciation allowances in a way that minimizes the welfare loss from...
Persistent link: https://www.econbiz.de/10013227004
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Notional Defined Contribution Pension Systems in a Stochastic Context : Design and Stability
Auerbach, Alan J. - 2010
Around the world, Pay-As-You-Go (PAYGO) public pension programs face serious long-term fiscal problems due primarily to actual and projected population aging, and most appear unsustainable as currently structured. Some have proposed the replacement of such plans with systems of fully funded...
Persistent link: https://www.econbiz.de/10012760480
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Fertility and Social Security
Boldrin, Michele; De Nardi, Mariacristina; Jones, Larry - 2021
The data show that an increase in government provided old-age pensions is strongly correlated with a reduction in fertility. What type of model is consistent with this finding? We explore this question using two models of fertility, the one by Barro and Becker (1989), and the one inspired by...
Persistent link: https://www.econbiz.de/10013223341
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Why a Funded Pension System is Useful and Why it is Not Useful
Sinn, Hans-Werner - 2021
Based on explicit present value calculations, the paper criticizes the view that the PAYGO system wastes economic resources. In present value terms, there is nothing to be gained from a transition to funded system even though the latter offers a permanently higher rate of return. The sum of the...
Persistent link: https://www.econbiz.de/10013210645
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Old Europe Ages : Reforms and Reform Backlashes
Börsch-Supan, Axel H. - 2010
The extent of the demographic changes in Europe is dramatic and will deeply affect future labor, financial and goods markets. The expected strain on public budgets and especially social security has already received prominent attention, but aging poses many other economic challenges that...
Persistent link: https://www.econbiz.de/10013147613
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Simulating the Privatization of Social Security in General Equilibrium
Kotlikoff, Laurence J. - 2022
This paper studies the macroeconomic and efficiency effects of privatizing social security. It does so by simulating alternative privatization schemes using the Auerbach-Kotlikoff Dynamic Life-Cycle Model. The simulations indicate three things. First, privatizing social security can generate...
Persistent link: https://www.econbiz.de/10013324137
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The Pay-as-You-Go Pension System as a Fertility Insurance and Enforcement Device
Sinn, Hans-Werner - 2022
It is argued that a PAYGO system may have useful allocative functions in that it serves as an insurance against not having children and as an enforcement device for rotten kid' who are unwilling to pay their parents a pension. It is true that the system has amoral hazard effect in terms of...
Persistent link: https://www.econbiz.de/10014158127