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Five Fallacies in the Social Security Debate

  • Persson, Mats


    (Institute for International Economic Studies, Stockholm University)

This paper discusses five examples of the conventional wisdom that has often been expressed in the social security debate, even among academic economists. These are: 1. The major problem in most social security systems is that of demography: people simply live too long. 2. Disregarding the issue of demography, a Pay-As-You-Go system is inferior to a fully funded system since the former usually has a lower rate of return. 3. Disregarding the portfolio aspect (which might favor a PAYG system), a funded system dominates a PAYG system in a world of certainty. 4. The social security system is a suitable instrument for intergenerational risk sharing. 5. The government is a safe and reliable provider of insurance.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 686.

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Length: 24 pages
Date of creation: 01 Jun 2000
Date of revision:
Handle: RePEc:hhs:iiessp:0686
Contact details of provider: Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
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  1. Agell, Jonas & Persson, Mats, 1997. "Tax Arbitrage and Labor Supply," Working Paper Series 1997:26, Uppsala University, Department of Economics.
  2. Hassler, John & Rodríguez Mora, José V., 1997. "Employment Turnover and Unemployment Insurance," Seminar Papers 623, Stockholm University, Institute for International Economic Studies.
  3. Hassler, J. & Lindbeck, A., 1997. "Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems," Papers 631, Stockholm - International Economic Studies.
  4. Lars E.O. Svensson, 2000. "The First Year of the Eurosystem: Inflation Targeting or Not?," NBER Working Papers 7598, National Bureau of Economic Research, Inc.
  5. Svensson, Lars E O, 1999. "How Should Monetary Policy Be Conducted In An Era Of Price Stability?," CEPR Discussion Papers 2342, C.E.P.R. Discussion Papers.
  6. Persson, Torsten & Tabellini , Guido, 1997. "Political Economics and Macroeconomic Policy," Seminar Papers 630, Stockholm University, Institute for International Economic Studies.
  7. Lars E. O. Svensson, 2000. "Does the P* Model Provide Any Rationale for Monetary Targeting?," German Economic Review, Verein für Socialpolitik, vol. 1(1), pages 69-81, 02.
  8. Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999. "Labor Supply Prediction when Tax Avoidance Matters," Working Paper Series 1999:16, Uppsala University, Department of Economics.
  9. Svensson, Lars & Faust, Jon, 1999. "The Equilibrium Degree of Transparency and Control in Monetary Policy," Seminar Papers 669, Stockholm University, Institute for International Economic Studies.
  10. Acemoglu, Daron & Zilibotti, Fabrizio, 1998. "Productivity Differences," Seminar Papers 660, Stockholm University, Institute for International Economic Studies.
  11. Svensson, Lars E.O., 1997. "Inflation Targeting: Some Extensions," Seminar Papers 625, Stockholm University, Institute for International Economic Studies.
  12. Acemoglu, Daron & Zilibotti, Fabrizio, 1999. " Information Accumulation in Development," Journal of Economic Growth, Springer, vol. 4(1), pages 5-38, March.
  13. Lars E.O. Svensson, 1999. "Monetary Policy Issues for the Eurosystem," NBER Working Papers 7177, National Bureau of Economic Research, Inc.
  14. Glenn D. Rudebusch & Lars E. O. Svensson, 1998. "Policy Rules for Inflation Targeting," NBER Working Papers 6512, National Bureau of Economic Research, Inc.
  15. Anderson, J-E, 1997. "Revenue Neutral Trade Reform With Many Households, Quotas and Tariffs," Papers 626, Stockholm - International Economic Studies.
  16. Rose, Andrew K, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," CEPR Discussion Papers 2329, C.E.P.R. Discussion Papers.
  17. Hassler, John & Mora , José V. Rodríguez, 1998. "IQ, Social Mobility and Growth," Seminar Papers 635, Stockholm University, Institute for International Economic Studies.
  18. Svensson, Lars E O, 1998. "Open-Economy Inflation Targeting," CEPR Discussion Papers 1989, C.E.P.R. Discussion Papers.
  19. Svensson, Lars E O, 1998. "Inflation Targeting as a Monetary Policy Rule," CEPR Discussion Papers 1998, C.E.P.R. Discussion Papers.
  20. Storesletten, Kjetil, 1998. "Sustaining Fiscal Policy Through Immigration," Seminar Papers 664, Stockholm University, Institute for International Economic Studies.
  21. Zenou, Yves, 1999. "Urban Unemployment and City Formation. Theory and Policy Implications," Seminar Papers 662, Stockholm University, Institute for International Economic Studies.
  22. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 1998. "Equilibrium unemployment insurance," Economics Working Papers 605, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999.
  23. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers 1737, C.E.P.R. Discussion Papers.
  24. Taylor, John B., 1998. "The Robustness and Efficiency of Monetary Policy Rules as Guidelines for Interest Rate Setting by the European Central Bank," Seminar Papers 649, Stockholm University, Institute for International Economic Studies.
  25. Marimon, R. & Zilibotti, F., 1998. "Unemployment vs. Mismatch of Talents," Papers 661, Stockholm - International Economic Studies.
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