Improving the Equity-Efficiency Trade-Off: Mandatory Savings Accounts for Social Insurance

Lans Bovenberg and Peter Birch Sørensen ()

International Tax and Public Finance, 2004, vol. 11, issue 4, 507-529

Abstract: In the modern welfare state a substantial part of an individual's tax bill is transferred back to the same individual taxpayer in the form of social transfers. This provides a rationale for financing part of social insurance through mandatory savings accounts. We analyze the behavioral and welfare effects of compulsory savings accounts in an intertemporal model with uncertainty, involuntary unemployment, endogenous retirement decisions, credit constraints, and heterogeneous agents. We show that the introduction of (early) retirement and unemployment accounts generates a Pareto improvement by enabling the government to provide lifetime income insurance and liquidity insurance in a more efficient manner.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://journals.kluweronline.com/issn/0927-5940/contents (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Improving the Equity-Efficiency Trade-off: Mandatory Savings Accounts for Social Insurance (2003)
Working Paper: Improving the Equity-Efficiency Trade-Off: Mandatory Savings Accounts for Social Insurance (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:11:y:2004:i:4:p:507-529

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().