Social Security Privatization with Income-Mortality Correlation.
dc.contributor.author | Nishiyama, Shinichi | |
dc.contributor.author | Smetters, Kent | |
dc.date.accessioned | 2007-02-12T21:34:54Z | |
dc.date.available | 2007-02-12T21:34:54Z | |
dc.date.issued | 2006-11 | |
dc.identifier.uri | https://hdl.handle.net/2027.42/49381 | |
dc.description.abstract | While privatizing Social Security can improve labor supply incentives, it can also reduce risk sharing. We simulate a 50-percent privatization using an overlapping-generations model where heterogeneous agents with elastic labor supply face idiosyncratic earnings shocks and longevity uncertainty. When wage shocks are insurable, privatization produces about $30,100 of extra resources for each future household after all transitional losses have been paid. When wages are not insurable, privatization reduces efficiency by about $8,100 per future household. We check the robustness of these results to different model specifications as well as policy reforms and arrive at several surprising conclusions. First, privatization performs better in a closed economy, where interest rates decline with capital accumulation, than in an open economy. Second, privatization also performs better when an actuarially-fair private annuity market does — not — exist. Third, government matching of private contributions on a progressive basis is not very effective at restoring efficiency and can actually harm. | en |
dc.description.sponsorship | Social Security Administration | en |
dc.format.extent | 347908 bytes | |
dc.format.mimetype | application/pdf | |
dc.language.iso | en_US | en |
dc.publisher | Michigan Retirement Research Center, University of Michigan, P.O. Box 1248, Ann Arbor, MI 48104 | en |
dc.relation.ispartofseries | WP 2006-140 | en |
dc.title | Social Security Privatization with Income-Mortality Correlation. | en |
dc.type | Working Paper | en |
dc.subject.hlbsecondlevel | Population and Demography | |
dc.subject.hlbtoplevel | Social Sciences | |
dc.contributor.affiliationum | University of Michigan Retirement Research Center | en |
dc.contributor.affiliationum | Institute for Social Research | |
dc.contributor.affiliationother | Georgia State University | en |
dc.contributor.affiliationother | The Wharton School, University of Pennsylvania | en |
dc.contributor.affiliationumcampus | Ann Arbor | en |
dc.description.bitstreamurl | http://deepblue.lib.umich.edu/bitstream/2027.42/49381/1/wp140.pdf | en_US |
dc.owningcollname | Retirement and Disability Research Center, Michigan (MRDRC) |
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