A Note on Resource Testing and Temptation
19 Pages Posted: 3 Jul 2016
Date Written: November 1, 2015
This study analyzes the relative performance in terms of welfare of the current U.S. PAYG system compared to an array of cost equivalent alternative specifications of means-tested pension programs. We conduct our analysis under two different settings. While in the first setting, individuals have standard preferences, in the second setting individuals have self-control preferences. We show that the implications of the reform substantially differs across the two settings.
Keywords: Dynamic general equilibrium, social security, means testing, welfare
JEL Classification: E21, E62, H55
Suggested Citation: Suggested Citation