This paper uses a large-scale overlapping generations model that features intragenerational heterogeneity to show that privatizing the U.S. Social Security System could be done on a progressive basis. We start with a close replica of the current system; specifically, we include Social Security's...

The United States Social Security system is fairly unique in that it explicitly allows for a progressive formulation of retirement benefits by assigning a larger replacement rate to workers with small preretirement wages. In contrast, the public pension systems in other countries often replace a...

If the U.S. federal government properly accounted for its explicit and promised liabilities, it would record a national debt of $64 trillion and a national deficit of $2.4 trillion in 2006. Although capital markets seem to care about the officially reported budget deficit a metric that is...

A new explanation is offered for the thin private market for individual annuities in the United States. Individuals face a risk of health shocks which simultaneously cause large uninsured expenses and shorten the life expectancy. The value of a life annuity then decreases at the same time as the...