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The Joint Impact of Social Security and Medicaid on Incentives and Welfare

Author

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  • Tatyana Koreshkova

    (Concordia University)

  • Karen Kopecky

    (Federal Reserve Bank of Atlanta)

Abstract

We evaluate the joint effects of social security and Medicaid on labor supply, savings, economic inequality, and welfare in an environment with idiosyncratic risk in labor earnings, health expenses, and survival. The model features households consisting males and females; a progressive social security system which provides insurance against lifetime earnings, health expense, survival and spousal death risks; and a means-tested social insurance system that proxies for the US Medicaid program. We show that the annuity role of social security benefits entails important welfare gains in the presence of health expense risk and Medicaid.

Suggested Citation

  • Tatyana Koreshkova & Karen Kopecky, 2012. "The Joint Impact of Social Security and Medicaid on Incentives and Welfare," 2012 Meeting Papers 967, Society for Economic Dynamics.
  • Handle: RePEc:red:sed012:967
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    References listed on IDEAS

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    Cited by:

    1. Harold L. Cole & Soojin Kim & Dirk Krueger, 2012. "Analyzing the Effects of Insuring Health Risks: On the Trade-off between Short Run Insurance Benefits vs. Long Run Incentive Costs," NBER Working Papers 18572, National Bureau of Economic Research, Inc.

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