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Social security reform with impure intergenerational altruism

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  • Yang, Fang

Abstract

This paper studies the long-run aggregate and welfare effects of eliminating Social Security in a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by voluntary and accidental bequests. Social Security in this model with impure altruism has a smaller effect on capital accumulation than in a pure life-cycle model, a bigger effect than in a model with two-sided altruism. The welfare gain of eliminating Social Security system under impure altruism is smaller than that in a pure life-cycle model, and bigger than that in a model with two-sided altruism.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 37 (2013)
Issue (Month): 1 ()
Pages: 52-67

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Handle: RePEc:eee:dyncon:v:37:y:2013:i:1:p:52-67

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Web page: http://www.elsevier.com/locate/jedc

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Keywords: Social security; Altruism; Heterogeneous agents; Welfare;

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Cited by:
  1. Mariacristina De Nardi & Fang Yang, 2014. "Bequests and Heterogeneity in Retirement Wealth," NBER Working Papers 20058, National Bureau of Economic Research, Inc.
  2. Fang Yang, 2012. "Lifetime Earning and Heterogeneity in Retirement Wealth: the Role of Bequests, Minimum Consumption, and Social Security," Discussion Papers 12-03, University at Albany, SUNY, Department of Economics.
  3. Michael Dotsey & Wenli Li & Fang Yang, 2012. "Home production and Social Security reform," Working Papers 12-5, Federal Reserve Bank of Philadelphia.

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