Social Security Wealth System Effect on Final Consumption: Overlapping Generations Models Analysis for a Panel of Countries

Abstract

This book investigates the impact of the social security system on final consumption, with the overlapping generations model for Macedonia and panel of countries. As hypothesis we set that social security reduces savings. Our results show that in all our models the average growth of social contributions increases final consumption, thereby reducing savings. In the models presented in this book consumption is a function of available income, the change in disposable income, then the social contributions per income and social wealth which is a proxy variable for gross capital formation, i.e. total human wealth.

Keywords: social security wealth system, overlapping generations models

JEL Classification: E62