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Social Security Incidence under Uncertainty Assessing Italian Reforms

  • Devis Geron
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    This paper analyzes the welfare effects of the Italian social security system in an economy with uncertainty on wages, financial market returns and life expectancy. The introduction of a pension system reproducing the Italian statutory scheme turns out to decrease ex-ante individual welfare, unless restrictions are assumed on retirement behavior. Overall, risk insurance effects of social security play a minor role in determining welfare variations. The new Italian NDC pension system is shown to yield a slight ex-ante welfare improvement from a purely risk-insurance perspective. This relative gain stems from risk diversification across working-life wages in computing benefits.

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    File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-10/cesifo1_wp2812.pdf
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    Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2812.

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    Date of creation: 2009
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    Handle: RePEc:ces:ceswps:_2812
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