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Old, sick, alone, and poor: a welfare analysis of old-age social insurance programs

R. Braun (), Karen Kopecky () and Tatyana Koreshkova ()

No 2013-02, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: Poor health, large acute and long-term care medical expenses, and spousal death are significant drivers of impoverishment among retirees. We document these facts and build a rich, overlapping generations model that reproduces them. We use the model to assess the incentive and welfare effects of Social Security and means-tested social insurance programs such as Medicaid and food stamp programs, for the aged. We find that U.S. means-tested social insurance programs for retirees provide significant welfare benefits for all newborn. Moreover, when means-tested social insurance benefits are of the scale in the United States, all individuals would prefer to be born into an economy with no Social Security. Finally, we find that the benefits of increasing means-tested social insurance are small or negative, if we hold fixed Social Security contributions and benefits at their current levels

Keywords: Social Security; Medicaid; social insurance; elderly; medical expenses (search for similar items in EconPapers)
JEL-codes: E62 H31 H52 H55 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2013-07-01
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-hea and nep-ias
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Journal Article: Old, Sick, Alone, and Poor: A Welfare Analysis of Old-Age Social Insurance Programmes (2017) Downloads
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