Welfare Implications of Uncertain Social Security Reform

Jaeger Nelson ()

Public Finance Review, 2020, vol. 48, issue 4, 425-466

Abstract: Policy uncertainty is a type of aggregate risk that has important economic and welfare implications. In this article, I develop a simple general equilibrium overlapping generations model in which households are uncertain as to the type and timing of an inevitable Social Security reform. I document how households’ expectations over the path of future policy influences their behavior. I find that the economic and welfare effects of policy uncertainty are highly sensitive to households’ beliefs over the path of future policy.

Keywords: policy uncertainty; welfare analysis; Social Security reform; household beliefs (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:48:y:2020:i:4:p:425-466

DOI: 10.1177/1091142120923640

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