Sosiaalitilit ja moraalikato

Jukka Lassila and Tarmo Valkonen

No 1181, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: Moral hazard means that people with insurance may take greater risks because they know they do not bear the full consequences of their actions. This can occur with both private insurance and social insurance. Deductibles can be used to alleviate the problem. An interesting way to bring deductibles into social insurance is to establish individual social accounts. Mandatory payments into individual social accounts that finance social insurance payments replace taxes that are currently financing social-insurance benefits. At retirement, the remaining balances in the accounts are paid to account holders or added to their retirement benefits. If the account balance is negative at that time, the account is set to zero. The report considers individual unemployment accounts, including severance payments accounts and employment bonuses, and health and long-term care accounts.

Keywords: social insurance; moral hazard; individual social accounts (search for similar items in EconPapers)
JEL-codes: H53 H55 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2009
New Economics Papers: this item is included in nep-ias
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