Abstract
How will the distribution of welfare, consumption, and leisure across households be affected by social security reform? This paper addresses this question for social security reforms with a two-tier structure by comparing steady states under a realistic version of the current U.S. system and under the two-tier system. The first tier is a mandatory, defined-contribution pension offering a retirement annuity proportional to the value of taxes paid, whereas the second tier guarantees a minimum retirement income. Our findings, which are summarized in the Introduction, do not in general favor the implementation of pay-as-you go versions of the two-tier system for the U.S. economy. Journal of Economic Literature Classification Numbers: D3, E6.
Original language | English (US) |
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Pages (from-to) | 498-531 |
Number of pages | 34 |
Journal | Review of Economic Dynamics |
Volume | 2 |
Issue number | 3 |
DOIs | |
State | Published - Jul 1999 |
Externally published | Yes |
Keywords
- Social security; distribution
ASJC Scopus subject areas
- Economics and Econometrics