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Pareto-Improving Social Security Reform when Financial Markets are Incomplete!? Author info | Abstract | Publisher info | Download info | Related research | Statistics Dirk Krueger
Felix Kubler
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This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly correlated, a system that endows retired households with claims to labor income enhances the sharing of aggregate risk between generations. Our quantitative analysis shows that, abstracting from the capital crowding-out effect, the introduction of social security represents a Pareto-improving reform, even when the economy is dynamically efficient. However, the severity of the crowding-out effect in general equilibrium tends to overturn these gains. (JEL D58, D91, E62, H31, H55)
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 96 (2006)
Issue (Month): 3 (June)
Pages: 737-755
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Handle: RePEc:aea:aecrev:v:96:y:2006:i:3:p:737-755Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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Paper Dirk Krueger & Felix Kubler, 2003.
"Pareto Improving Social Security Reform when Financial Markets are Incomplete? ,"
NBER Working Papers
9410, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Krüger, Dirk & Kubler, Felix, 2005.
"Pareto Improving Social Security Reform when Financial Markets Are Incomplete ,"
CEPR Discussion Papers
5039, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Dirk Krueger & Felix Kubler, 2005.
"Pareto Improving Social Security Reform when Financial Markets are Incomplete!? ,"
CFS Working Paper Series
2005/12, Center for Financial Studies.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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