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Idiosyncratic Risk, Aggregate Risk, and the Welfare Effects of Social Security
We ask whether a pay-as-you-go financed social security system is welfare improving in an economy with idiosyncratic productivity and aggregate business cycle risk. We show analytically that the whole welfare benefit from ...
Social Security in an Analytically Tractable Overlapping Generations Model with Aggregate and Idiosyncratic Risk
When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations. We derive the ...
Endogenous Retirement Behavior of Heterogeneous Households Under Pension Reforms
We propose a unified framework to measure the effects of different reforms of the pension system on retirement ages and macroeconomic indicators in the face of demographic change. A rich overlapping generations (OLG) model ...