Should Old-age Benefits Be Earnings-tested

Niku Määttänen and Panu Poutvaara

No 1062, Discussion Papers from The Research Institute of the Finnish Economy

Abstract: We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individualsŽ expected lifetime utility. Moreover, it also lowers the realized lifetime utilities of those at the bottom of the lifetime utility distribution.

Keywords: social security; retirement; means-testing; computational models (search for similar items in EconPapers)
JEL-codes: C68 H55 J26 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2006
New Economics Papers: this item is included in nep-dge and nep-pbe
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Working Paper: Should Old-Age Benefits Be Earnings-Tested? (2007)
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