The Welfare Cost of Perceived Policy Uncertainty: Evidence from Social Security

• 成果类型: Article
• 署名作者: Luttmer, Erzo F. P.; Samwick, Andrew A.
• 署名单位: Dartmouth College; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20151703
• 发表日期: 2018
• 页码: 275-307
• 关键词: Equity; WEALTH; risks

摘要

Policy uncertainty reduces individual welfare when individuals have limited opportunities to mitigate or insure against the resulting consumption fluctuations. We field an original survey to measure the degree of perceived policy uncertainty in Social Security benefits and to estimate the impact of this uncertainly on individual welfare. Our central estimates show that on average individuals are willing to forgo 6 percent of the benefits they are supposed to get under current law to remove the policy uncertainty associated with their future Social Security benefits. This translates to a risk premium from policy uncertainty equal to 10 percent of expected benefits.