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Assessing the Applicability of Hypothetical Workers for Defined-Contribution Pensions

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  • Wade D. Pfau

    (National Graduate Institute for Policy Studies)

Abstract

An understanding of the financial and distributional consequences of Social Security reform requires knowledge about the actual life circumstances of participants, including the level and pattern of their lifetime earnings and when they retire. Some analyses of Social Security reform make simplifying assumptions about these characteristics by using “hypothetical workers” with set career paths. We seek to develop greater understanding about actual lifetime earnings patterns to compare with hypothetical workers and find discrepancies which lead typical hypothetical workers to produce a more favorable impression for defined-contribution pension reforms. We suggest modifications to make a more suitable hypothetical worker.

Suggested Citation

  • Wade D. Pfau, 2008. "Assessing the Applicability of Hypothetical Workers for Defined-Contribution Pensions," GRIPS Discussion Papers 07-11, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:07-11
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    References listed on IDEAS

    as
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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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