The transition from a-pay-as-you-go to a fully-funded Social Security System: is there a role for social insurance?
AbstractThis paper develops a model to examine the effects of introducing a fully-funded government sponsored pension plan into an overlapping generations model with an extant pay-as-you-go social security system. We examine whether individual and social welfare can be improved by phasing out the current pay-as-you-go system and replacing it with a fully-funded system in which pension benefits are at least partially annuitized. Furthermore, we consider the effects of means testing social security benefits and providing a income guarantee funded in a pay-as-you-go manner. We find that the presence of risky investments increases the likelihood that the maintenance of a portion of the pay-as-you-go system, through a minimum retirement income guarantee, will be welfare improving.
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.
Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1997-022.
Date of creation: 1998
Date of revision:
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.:
- Sergio T. Rebelo, 1992.
"Long Run Policy Analysis and Long Run Growth,"
NBER Working Papers
3325, National Bureau of Economic Research, Inc.
- Eckstein, Zvi & Eichenbaum, Martin & Peled, Dan, 1985. "Uncertain lifetimes and the welfare enhancing properties of annuity markets and social security," Journal of Public Economics, Elsevier, vol. 26(3), pages 303-326, April.
- Sheshinski, Eytan & Weiss, Yoram, 1981.
"Uncertainty and Optimal Social Security Systems,"
The Quarterly Journal of Economics,
MIT Press, vol. 96(2), pages 189-206, May.
- Hamermesh, Daniel S & Menchik, Paul L, 1987.
"Planned and Unplanned Bequests,"
Western Economic Association International, vol. 25(1), pages 55-66, January.
- Robert G. King & Sergio Rebelo, 1990.
"Public Policy and Economic Growth: Developing Neoclassical Implications,"
NBER Working Papers
3338, National Bureau of Economic Research, Inc.
- King, Robert G & Rebelo, Sergio, 1990. "Public Policy and Economic Growth: Developing Neoclassical Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S126-50, October.
- King, R.G. & Rebelo, S., 1988. "Public Policy And Economic Growth: Developing Neoclassical Implications," RCER Working Papers 225, University of Rochester - Center for Economic Research (RCER).
- Joseph G. Altonji & Fumio Hayashi & Laurence J. Kotlikoff, 1993.
"Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data,"
NBER Working Papers
3046, National Bureau of Economic Research, Inc.
- Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-98, December.
- Auerbach, A.J. & Kotlikoff, L.J. & Weil, D.N., 1992.
"The Increasing Annuitization of the Elderly - Estimates and Implications for Intergenerational Transfers, Inequality and National Saving,"
6, Boston University - Department of Economics.
- Alan J. Auerbach & Laurence J. Kotlikoff & David N. Weil, 1992. "The Increasing Annuitization of the Elderly- Estimates and Implications for Intergenerational Tranfers, Inequality, and National Saving," NBER Working Papers 4182, National Bureau of Economic Research, Inc.
- Townley, Peter G. C. & Boadway, Robin W., 1988.
"Social security and the failure of annuity markets,"
Journal of Public Economics,
Elsevier, vol. 35(1), pages 75-96, February.
- Peter Townley & Robin Boadway, 1986. "Social Security and the Failure of Annuity Markets," Working Papers 652, Queen's University, Department of Economics.
- Rowena A. Pecchenino & Patricia S. Pollard, 1995.
"The effects of annuities, bequests, and aging in an overlapping generations model of endogenous growth,"
1995-008, Federal Reserve Bank of St. Louis.
- Pecchenino, Rowena A & Pollard, Patricia S, 1997. "The Effects of Annuities, Bequests, and Aging in an Overlapping Generations Model of Endogenous Growth," Economic Journal, Royal Economic Society, vol. 107(440), pages 26-46, January.
- Saint-Paul, G., 1991.
"Fiscal Policy In An Endogenous Growth Model,"
DELTA Working Papers
91-04, DELTA (Ecole normale supérieure).
- John Laitner & F. Thomas Juster, 1993.
"New evidence on altruism: a study of TIAA-CREF retirees,"
Discussion Paper / Institute for Empirical Macroeconomics
86, Federal Reserve Bank of Minneapolis.
- Laitner, John & Juster, F Thomas, 1996. "New Evidence on Altruism: A Study of TIAA-CREF Retirees," American Economic Review, American Economic Association, vol. 86(4), pages 893-908, September.
- Andrew B. Abel, 1987.
"Capital Accumulation and Uncertain Lifetimes with Adverse Selection,"
NBER Working Papers
1664, National Bureau of Economic Research, Inc.
- Abel, Andrew B, 1986. "Capital Accumulation and Uncertain Lifetimes with Adverse Selection," Econometrica, Econometric Society, vol. 54(5), pages 1079-97, September.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-37, October.
- Samuelson, Paul A, 1975. "Optimum Social Security in a Life-Cycle Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 539-44, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao).
If references are entirely missing, you can add them using this form.