Mitigating America's demographic dilemma by pre-funding social security

• 成果类型: Article
• 署名作者: Kotlikoff, Laurence J.; Smetters, Kent; Walliser, Jan
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; Boston University; The World Bank
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2005.10.020
• 发表日期: 2007
• 页码: 247-266
• 关键词: demographic transition; Social Security; life cycle model

摘要

Financing Social Security benefits at current levels implies significant increases in payroll taxes within the next 20 years under current US demographic developments. Using a general-equilibrium overlapping-generations model with realistic patterns of fertility and lifespan extension, this study shows that future generations would be harmed during the demographic transition due to rising pavroll taxes, which crowd out savings and slow real wage growth below the rate of technological progress. A faster rate of technological progress would mitigate only some of the payroll tax increase and its economic consequences but could not overcome them. Addressing the financing problem by reducing Social Security benefits as needed or by raising the eligibility age for benefits imposes major welfare losses on current or near term retirees. By contrast, a pre-funding of Social Security financed with consumption taxes more evenly spreads the welfare losses across generations, and it helps future generations, especially the poor, by stimulating capital formation. (c) 2006 Elsevier B.V. All rights reserved.