22 Pages Posted: 12 Apr 2005
Date Written: April 12, 2005
This paper explores the feasibility of a government-sponsored insurance company, patterned after the government-sponsored mortgage agencies, that would be authorized to sell government-insured wage-indexed retirement annuities. This enterprise would assume the current obligations and cash flows of the social security system in exchange for the exclusive right to sell additional insurance contracts. It may or may not choose to finance itself through the issuance of equity shares. The empirical analysis in the paper focuses on the stochastic nature of the liabilities faced by such an agency and in particular examines the optimal portfolio of assets required to hedge wage-indexed liabilities.
Keywords: Social Security, Wage Inedexation
JEL Classification: G22, H55
Suggested Citation: Suggested Citation
Goetzmann, William N., More Social Security, Not Less (April 12, 2005). Yale ICF Working Paper No. 05-05. Available at SSRN: https://ssrn.com/abstract=703141