Efficiency and Equity Aspects of Alternative Social Security Rules

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Abstrakt

This paper studies human-capital formation, labor-supply, and retirement decisions associated with four alternative regimes of social security. We implement a theoretical model with overlapping generations of households and two different ability types within each generation. We find that with a given social security contribution rate, it is better to transfer income to the elderly as old-age benefits, paid independently of labor-market status. This holds with both Bismarckian and Beveridgean benefits. With sufficiently small ability differences, a Bismarckian system of old-age benefits is likely to offer the highest level of utility to all citizens.
OriginalsprogEngelsk
TidsskriftFinanzarchiv
Vol/bind60
Udgave nummer3
Sider (fra-til)325-358
ISSN0015-2218
StatusUdgivet - 2004
Udgivet eksterntJa

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