Individual Savings Accounts and the Life-Cycle Approach to Social Insurance
Publikation: Working paper › Forskning
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Individual Savings Accounts and the Life-Cycle Approach to Social Insurance. / Sørensen, Peter Birch; Hansen, Martin Ino; Bovenberg, A. Lans.
Economic Policy Research Unit. Department of Economics, University of Copenhagen, 2006.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Individual Savings Accounts and the Life-Cycle Approach to Social Insurance
AU - Sørensen, Peter Birch
AU - Hansen, Martin Ino
AU - Bovenberg, A. Lans
N1 - JEL Classification: H53, H55
PY - 2006
Y1 - 2006
N2 - Using Danish data, we find that about three fourths of the taxes levied to finance public transfers actually finance benefits that do not redistribute between people but redistribute income over the life cycle of individual taxpayers. This provides a rationale for financing part of social insurance via mandatory individual savings accounts. An account system that offers liquidity insurance and a lifetime income guarantee helps to alleviate the dilemma between insurance and incentives. To illustrate this, we analyse a specific proposal for reform of the Danish system of social insurance, involving the use of individual accounts. We estimate how the reform would affect the distribution of lifetime incomes, the public budget, and economic efficiency
AB - Using Danish data, we find that about three fourths of the taxes levied to finance public transfers actually finance benefits that do not redistribute between people but redistribute income over the life cycle of individual taxpayers. This provides a rationale for financing part of social insurance via mandatory individual savings accounts. An account system that offers liquidity insurance and a lifetime income guarantee helps to alleviate the dilemma between insurance and incentives. To illustrate this, we analyse a specific proposal for reform of the Danish system of social insurance, involving the use of individual accounts. We estimate how the reform would affect the distribution of lifetime incomes, the public budget, and economic efficiency
KW - Faculty of Social Sciences
KW - social insurance
KW - individual accounts
KW - lifetime income distribution
M3 - Working paper
BT - Individual Savings Accounts and the Life-Cycle Approach to Social Insurance
PB - Economic Policy Research Unit. Department of Economics, University of Copenhagen
ER -
ID: 327342