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Elimination of Social Security in a Dynastic Framework

Author

Listed:
  • Luisa Fuster

    (Toronto & UPF)

  • Ayse Imrohoroglu

    (USC)

  • Selahattin Imrohoroglu

    (USC)

Abstract

In this paper we study the welfare effects of eliminating social security in a model with two sided altruism where social security provides insurance against lifetime and individual income uncertainty. Our findings indicate that households are able to shift the efficiency gains, generated through privatization of social security, across parents and children quite successfully. Contrary to a pure life-cycle setup, our framework yields significant support for even an uncompensated elimination of unfunded social security.

Suggested Citation

  • Luisa Fuster & Ayse Imrohoroglu & Selahattin Imrohoroglu, 2004. "Elimination of Social Security in a Dynastic Framework," Macroeconomics 0402008, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpma:0402008
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