Is altruism important for understanding the long-run effects of social security?

Luisa Fuster

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper quantifies the effects of social security on capital accumulation and wealth distribution in a life cycle framework with altruistic individuals. The main findings of this paper are that the current U.S. social security system has a significant impact on capital accumulation and wealth distribution. I find that social security crowds out 8\% of the capital stock of an economy without social security. This effect is driven by the distortions of labor supply due to the taxation of labor income rather than by the intergenerational redistribution of income imposed by the social security system. In contrast to previous analysis of social security, I found that social security does not affect the savings rate of the economy. Another interesting finding is that even though the current U.S. social security system is progressive in its benefits, it may lead to a more disperse distribution of wealth.

Keywords: Social security; capital accumulation; altruism; wealth distribution (search for similar items in EconPapers)
JEL-codes: E62 H22 H55 J2 (search for similar items in EconPapers)
Date: 1997-09
New Economics Papers: this item is included in nep-cdm, nep-dge, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://econ-papers.upf.edu/papers/234.pdf Whole Paper (application/pdf)

Related works:
Journal Article: Is Altruism Important for Understanding the Long-Run Effects of Social Security? (1999)
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:upf:upfgen:234

Access Statistics for this paper

More papers in Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).