Arbeitspapier

Savings Accounts and the Life-Cycle Approach to Social Insurance

Using Danish data, we find that about three fourths of the taxes levied to finance public transfers actually finance benefits that do not redistribute between people but redistribute income over the life cycle of individual taxpayers. This provides a rationale for financing part of social insurance via mandatory individual savings accounts. An account system that offers liquidity insurance and a lifetime income guarantee helps to alleviate the dilemma between insurance and incentives. To illustrate this, we analyse a specific proposal for reform of the Danish system of social insurance, involving the use of individual accounts. We estimate how the reform would affect the distribution of lifetime incomes, the public budget, and economic efficiency. Our analysis suggests that, even with conservative assumptions regarding labor supply elasticities, the proposed reform would generate a Pareto improvement and would imply only a minor increase in the inequality of lifetime income distribution.

Sprache
Englisch

Erschienen in
Series: EPRU Working Paper Series ; No. 2006-03

Klassifikation
Wirtschaft
National Government Expenditures and Welfare Programs
Social Security and Public Pensions
Thema
social insurance
individual accounts
lifetime income distribution
Sozialversicherung
Öffentliche Sozialleistungen
Lebenseinkommen
Einkommensverteilung
Dänemark
Verteilungswirkung

Ereignis
Geistige Schöpfung
(wer)
Birch Sørensen, Peter
Hansen, Martin Ino
Bovenberg, A. Lans
Ereignis
Veröffentlichung
(wer)
University of Copenhagen, Economic Policy Research Unit (EPRU)
(wo)
Copenhagen
(wann)
2006

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Birch Sørensen, Peter
  • Hansen, Martin Ino
  • Bovenberg, A. Lans
  • University of Copenhagen, Economic Policy Research Unit (EPRU)

Entstanden

  • 2006

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