Opting out of social security

• 成果类型: Article
• 署名作者: Smetters, K; Walliser, J
• 署名单位: University of Pennsylvania; The World Bank
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(02)00180-9
• 发表日期: 2004
• 页码: 1295-1306

摘要

The liability facing a pay-as-you-go social security system can be calculated in several ways. Many conversions, including that which took place in Chile, and in many plans to convert the U.S. system, assume the largest measure, known as the 'shutdown liability.' This measure pays many workers who have contributed to the public system more money than the public system is actually worth to them, thereby placing a larger burden on future generations. But other liability measures are hard to implement due to an information asymmetry between the government and individuals about an individual's skill level. This paper demonstrates that a very simple reform plan-simply letting people opt out of social security-generates a truthful revelation equilibrium in which agents reveal private information about their skill levels. The new assumed liability measure is much smaller since it more accurately assigns a liability to each individual. A smaller liability, therefore, is passed onto future generations, which also generates quicker transition paths. It also does a better job protecting the welfare of the initial elderly when general revenue is used to pay for the transition. Simulation evidence is provided using a large-scale lifecycle model with heterogeneous skill levels. (C) 2002 Elsevier B.V. All rights reserved.