Harenberg, Daniel; Ludwig, Alexander - 2014 - This version: March 20, 2014
We ask whether a PAYG-financed social security system is welfare improving in an economy with idiosyncratic and … with a contribution rate of two percent leads to welfare gains of 2.2% of lifetime consumption in expectation, despite … substantial crowding out of capital. This welfare gain stands in contrast to the welfare losses documented in the previous …