Social Security Incidence under Uncertainty Assessing Italian Reforms

Devis Geron ()

No CESifo Working Paper No. 2812, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper analyzes the welfare effects of the Italian social security system in an economy with uncertainty on wages, financial market returns and life expectancy. The introduction of a pension system reproducing the Italian statutory scheme turns out to decrease ex-ante individual welfare, unless restrictions are assumed on retirement behavior. Overall, risk insurance effects of social security play a minor role in determining welfare variations. The new Italian NDC pension system is shown to yield a slight ex-ante welfare improvement from a purely risk-insurance perspective. This relative gain stems from risk diversification across working-life wages in computing benefits.

Keywords: social security reforms; uncertainty; risk insurance (search for similar items in EconPapers)
JEL-codes: E62 H21 H31 H55 (search for similar items in EconPapers)
Date: 2009
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