A Life-Cycle Analysis of Social Security with Housing

Kaiji Chen ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper incorporates two features of housing in a life-cycle analysis of social security: housing as a durable good and housing market frictions. We find that with housing as a durable good unfunded social security substantially crowds out housing consumption throughout the life cycle. By contrast, aggregate non-durable consumption is higher when social security is present, although it is postponed until late in life. Moreover, in the presence of housing market frictions, social security lowers the aggregate home ownership rate and reduces the average size of owner-occupied housing. The effects of social security on housing position, furthermore, exhibit substantial heterogeneity across households of different income levels.

Keywords: Durable Goods; Housing Market Frictions; Housing Tenure Choice; Social Security (search for similar items in EconPapers)
JEL-codes: E62 H55 E21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-mac and nep-ure
Date: 2009-05
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