Should we refinance unfunded social security?

Gahramanov, Emin and Tang, Xueli 2013, Should we refinance unfunded social security?, Economica, vol. 80, no. 319, pp. 532-565, doi: 10.1111/ecca.12023.

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Title Should we refinance unfunded social security?
Author(s) Gahramanov, Emin
Tang, XueliORCID iD for Tang, Xueli
Journal name Economica
Volume number 80
Issue number 319
Start page 532
End page 565
Total pages 34
Publisher Wiley-Blackwell Publishing
Place of publication Chichester, England
Publication date 2013-07
ISSN 0013-0427
Keyword(s) labour supply
payroll revenues
consumption tax
pension benefits
Summary Within a continuous-time overlapping generations model, featuring endogenous intensive margin of the labour supply and retirement decision, we analyse the issue of passing the burden of payroll revenues onto consumption or capital. We find that large long-run welfare gains occur when pension benefits are refinanced by consumption taxes. However, the transition to the new steady state is very painful for a large fraction of existing cohorts. On the other hand, the capital base is too small to sustain pension benefits but could be made larger if capital taxes are raised. Yet that would entail significant welfare losses.
Language eng
DOI 10.1111/ecca.12023
Field of Research 140102 Macroeconomic Theory
Socio Economic Objective 910109 Savings and Investments
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2013
Copyright notice ©2013, Wiley-Blackwell Publishing
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Document type: Journal Article
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School of Accounting, Economics and Finance
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