Pareto improving social security reform when financial markets are incomplete!?

Arbeitspapier

This paper studies an overlapping generations model with stochastic production and incomplete markets to assess whether the introduction of an unfunded social security system leads to a Pareto improvement. When returns to capital and wages are imperfectly correlated a system that endows retired households with claims to labor income enhances the sharing of aggregate risk between generations. Our quantitative analysis shows that, abstracting from the capital crowding-out effect, the introduction of social security represents a Pareto improving reform, even when the economy is dynamically effcient. However, the severity of the crowding-out effect in general equilibrium tends to overturn these gains.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CFS Working Paper ; No. 2005/12

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Fiscal Policy ; Social Security and Public Pensions ; Fiscal Policies and Behavior of Economic Agents: Household ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Computable and Other Applied General Equilibrium Models
• Thema: Social Security Reform ; Aggregate Fluctuations ; Intergenerational Risk Sharing ; Incomplete Markets ; Rentenreform ; Pareto-Optimum ; Finanzmarkt ; Unvollkommener Markt ; Overlapping Generations ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Krueger, Dirk ; Kubler, Felix
• Ereignis: Veröffentlichung
• (wer): Goethe University Frankfurt, Center for Financial Studies (CFS)
• (wo): Frankfurt a. M.
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/25454
• URN: urn:nbn:de:hebis:30-10881
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ