Social Security Reform with Impure Intergenerational Altruism

35 Pages Posted: 27 Mar 2009

See all articles by Fang Yang

Fang Yang

Louisiana State University, Baton Rouge

Date Written: March 25, 2009

Abstract

This paper studies the long-run aggregate and welfare effects of eliminating Social Security in a quantitative dynamic general equilibrium life-cycle model where parents and their children are linked by voluntary and accidental bequests. Social security in this model with impure altruism has a smaller effect on capital accumulation than in a pure life-cycle model, a bigger effect than in a model with two-sided altruism. The welfare gain of eliminating Social Security system under impure altruism is smaller than in a pure life-cycle model, and bigger than in a model with two-sided altruism.

Keywords: Social Security, Altruism, Heterogeneous agents, Welfare

JEL Classification: C68, D52, E6, H55

Suggested Citation

Yang, Fang, Social Security Reform with Impure Intergenerational Altruism (March 25, 2009). Available at SSRN: https://ssrn.com/abstract=1368540 or http://dx.doi.org/10.2139/ssrn.1368540

Fang Yang (Contact Author)

Louisiana State University, Baton Rouge ( email )

Baton Rouge, LA 70803
United States

HOME PAGE: http://faculty.bus.lsu.edu/fyang/

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