Evaluating pay-as-you-go social security systems

Arbeitspapier

This paper proposes a method for the welfare analysis of pay-as-you-go social security systems. We derive a formula for the welfare consequences of a permanent marginal change in the payroll tax rate that is valid under weak assumptions about the deep structure of the economy. Our approach requires neither a full specification of preferences and technology, nor knowledge of the individual savings behavior. Instead of parameterizing and calibrating the deep model structure, we implement our formula based on reduced form estimates of a VAR model. We apply our method to evaluate the social security system in the United States.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 15-07

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; Social Security and Public Pensions
• Subject: social security system ; overlapping generations ; optimal payroll taxes ; welfare analysis ; reduced form VAR

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bachmann, Andreas ; Wüthrich, Kaspar
• Event: Veröffentlichung
• (who): University of Bern, Department of Economics
• (where): Bern
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/126625
• Last update: 10.03.2025, 11:43 AM CET