On the Distributional Effects of Social Security Reform

Mark Huggett, Gustavo Ventura

Research output: Contribution to journalArticle

77 Scopus citations

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 languageEnglish (US)
Pages (from-to)498-531
Number of pages34
JournalReview of Economic Dynamics
Volume2
Issue number3
DOIs
StatePublished - Jul 1 1999

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Keywords

  • Social security; distribution

ASJC Scopus subject areas

  • Economics and Econometrics

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