 Home Production and Social Security ReformFang Yang, Michael Dotsey () and Wenli Li Departmental Working Papers from Department of Economics, Louisiana State University Abstract: This paper incorporates home production into a dynamic general equilibrium model of overlapping generations with endogenous retirement to study Social Secu- rity reforms. As such, the model di�erentiates both consumption goods and labor e�ort according to their respective roles in home production and market activities. Using a calibrated model, we conduct a policy experiment where we eliminate the current pay-as-you-go Social Security System. We ?nd that the experiment has important implications for labor supply as well as consumption decisions and that these decisions are in?uenced by the presence of a home production technology. Comparing our economy to a one-good economy without home production, the welfare gains of eliminating Social Security are magni?ed signi?cantly especially in the long run. These policy analyses suggest the importance of modeling home production and distinguishing between both time use and consumption goods de- pending on whether they are involved in market or home production. Date: 2014-02 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:lsu:lsuwpp:2014-02 Access Statistics for this paper More papers in Departmental Working Papers from Department of Economics, Louisiana State University Contact information at EDIRC. |
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