Tax-Favored Retirement Accounts: Are they Efficient in Increasing Savings and Growth?
AbstractThe paper aims to assess tax-favored retirement accounts in a general-equilibrium overlapping-generations economy with idiosyncratic income risk and borrowing constraints. Our simulations indicate that tax-favored retirement accounts as implemented in many OECD countries will have a significant impact on savings and transitional capital accumulation. In our most preferred specification, the latter will rise by roughly 6%, while about 22% of retirement account contributions are additional savings. While existing generations are worse off, future generations benefit significantly from higher bequests, higher wages, and lower tax burdens. However, since the reform also alters the insurance provision of the tax system, aggregate efficiency effects are mostly either negative or insignificant. Finally, it turns out that withdrawal penalties and tax-exempted accounts have positive growth and distributional implications.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 64 (2008)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.mohr.de/fa
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Other versions of this item:
- Hans Fehr & Christian Habermann & Fabian Kindermann, 2006. "Tax-Favored Retirement Accounts: Are they Efficient in Increasing Savings and Growth?," Working Papers 012, Bavarian Graduate Program in Economics (BGPE).
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Jarkko Harju, 2009.
"Voluntary pension savings: the effects of the Finnish tax reform on savers' behaviour,"
7, Government Institute for Economic Research Finland (VATT).
- Jarkko Harju, 2009. "Voluntary pension savings: the effects of the finnish tax reform on savers’ behaviour," Working Papers 2009/22, Institut d'Economia de Barcelona (IEB).
- Simonovits, András, 2009.
"Az önkéntes nyugdíjrendszer egy egyszerű modellje
[A simple model of tax-favoured retirement accounts]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 851-865.
- Hans Fehr & Christian Habermann, 2008.
"Private Retirement Savings in Germany: The Structure of Tax Incentives and Annuitization,"
SOEPpapers on Multidisciplinary Panel Data Research
133, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Hans Fehr & Christian Habermann, 2008. "Private Retirement Savings in Germany: The Structure of Tax Incentives and Annuitization," CESifo Working Paper Series 2238, CESifo Group Munich.
- Andras Simonovits, 2009. "A Simple Model of Tax-Favored Retirement Accounts," IEHAS Discussion Papers 0915, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- George Kudrna & Alan Woodland, 2012.
"Macroeconomic and Welfare Effects of the 2010 Changes to Mandatory Superannuation,"
201210, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales.
- George Kudrna & Alan D. Woodland, 2013. "Macroeconomic and Welfare Effects of the 2010 Changes to Mandatory Superannuation," The Economic Record, The Economic Society of Australia, vol. 89(287), pages 445-468, December.
- Hans Fehr, 2009. "Computable Stochastic Equilibrium Models and Their Use in Pension- and Ageing Research," De Economist, Springer, vol. 157(4), pages 359-416, December.
- Hans Fehr & Fabian Kindermann, 2009.
"Pension funding and individual accounts in economies with life-cyclers and myopes,"
2009/23, Institut d'Economia de Barcelona (IEB).
- Hans Fehr & Fabian Kindermann, 2010. "Pension Funding and Individual Accounts in Economies with Life-cyclers and Myopes," CESifo Economic Studies, CESifo, vol. 56(3), pages 404-443, September.
- Hans Fehr & Fabian Kindermann, 2009. "Pension Funding and Individual Accounts in Economies with Life-cyclers and Myopes," CESifo Working Paper Series 2724, CESifo Group Munich.
- Hans Fehr & Christian Habermann, 2010. "Private retirement savings and mandatory annuitization," International Tax and Public Finance, Springer, vol. 17(6), pages 640-661, December.
- George Kudrna & Alan Woodland, 2012. "Progressive Tax Changes to Private Pensions in a Life-Cycle Framework," Working Papers 201209, ARC Centre of Excellence in Population Ageing Research (CEPAR), Australian School of Business, University of New South Wales.
- Richard Ochmann, 2014.
"Differential income taxation and household asset allocation,"
Taylor & Francis Journals, vol. 46(8), pages 880-894, March.
- Richard Ochmann, 2010. "Differential Income Taxation and Household Asset Allocation," Discussion Papers of DIW Berlin 1058, DIW Berlin, German Institute for Economic Research.
- Jarkko Harju, 2012.
"Voluntary pension savings and tax incentives: Evidence from Finland,"
33, Government Institute for Economic Research Finland (VATT).
- Jarkko Harju, 2013. "Voluntary Pension Savings and Tax Incentives: Evidence from Finland," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 69(1), pages 3-29, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert).
If references are entirely missing, you can add them using this form.