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Social Security Reform with Impure Intergenerational Altruism

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  • Fang Yang

Abstract

This paper studies the long-run aggregate and welfare effect of eliminating Social Security in a quantitative dynamic general equilibrium life-cycle model where parents and their chidren 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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File URL: http://www.albany.edu/economics/research/workingp/2012/Security.pdf
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Bibliographic Info

Paper provided by University at Albany, SUNY, Department of Economics in its series Discussion Papers with number 12-01.

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Date of creation: 2012
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Handle: RePEc:nya:albaec:12-01

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Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
Phone: (518) 442-4735
Fax: (518) 442-4736

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Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
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Cited by:
  1. Michael Dotsey & Wenli Li & Fang Yang, 2012. "Home production and Social Security reform," Working Papers 12-5, Federal Reserve Bank of Philadelphia.
  2. Mariacristina De Nardi & Fang Yang, 2014. "Bequests and Heterogeneity in Retirement Wealth," NBER Working Papers 20058, National Bureau of Economic Research, Inc.
  3. 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.

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