For more than 25 years, the Social Security Trust Fund has been projected to run out of money in 2033 (give or take a few years), potentially causing benefits to be severely reduced in the absence of corrective legislative action. Today (February 2024), projections are made by the Social...

Poor heath, large acute and long-term care medical expenses, and spousal death are significant drivers of impoverishment among retirees. We document these facts and build a rich, overlapping generations model that reproduces them. We use the model to assess the incentive and welfare effects of...

Poor heath, large acute and long-term care medical expenses, and spousal death are significant drivers of impoverishment among retirees. We document these facts and build a rich, overlapping generations model that reproduces them. We use the model to assess the incentive and welfare effects of...

We quantify the importance of idiosyncratic health risk in a calibrated general-equilibrium model ofSocial Security. We construct an overlapping-generations model with rational-expectations households,idiosyncratic labor income and health risk, profit-maximizing firms, incomplete insurance...

This chapter reviews the literature on intergenerational risk sharing (IRS). We explore to what extent and how a market economy with an appropriate institutional setting can replicate a social planner's solution in models with increasing levels of complexity. In particular, we do this for...

Recent large municipal bankruptcies raise legal and moral questions of the priority in payment of the municipality's pension obligations. Focusing on existing law, we describe the bases on which pension obligations might have priority in bankruptcy. Priority under existing bankruptcy law...

U.S. state pensions are underfunded by trillions of dollars, but their economic burden is unclear. In a model of inefficient taxation, real estate fully reflects the cost of these shortfalls when it is the only form of immobile capital. We study the effect of pension shortfalls on real estate...

In 2019, few could have predicted that state and local pension funds would be faced with a pandemic that would slash state and local tax revenues and harm investment returns. Nevertheless, fund managers should have spent the past decade preparing for an inevitable market downturn. Instead, just...

The investment practices of public pension funds have become a topic of major interest in the wake of President Clinton's 1999 proposal to invest a portion of the Social Security Trust Funds in equities. Both supporters and opponents of the proposal point to the performance of public plans to...