Saving and pension reform in general equilibrium models

In this paper we study saving and pension reform in the context of general equilibrium models. We discuss some of the reasons for the existence of a social security system. We highlight the key features of the US data that a general equilibrium model of saving and social security should match: the l...

Full description

Saved in:
Bibliographic Details
Published in:Oxford review of economic policy 2001-03, Vol.17 (1), p.20-39
Main Authors: De Nardi, M, Imrohoroglu, S, Sargent, TJ
Format: Article
Language:English
Subjects:
Age
Demography
Economic policy
Equilibrium models
General equilibrium model
Income taxes
Life cycles
Parametric models
Payroll taxes
Pension schemes
Pensions
Population ageing
Retirement
Retirement age
Savings
Savings rates
Social security
Social security tax
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In this paper we study saving and pension reform in the context of general equilibrium models. We discuss some of the reasons for the existence of a social security system. We highlight the key features of the US data that a general equilibrium model of saving and social security should match: the life-cycle profiles of savings, consumption and hours worked, and the aggregate capital-output ratio and saving rate. We describe the structure of a general equilibrium model, and discuss how its parameters are estimated or calibrated from the data. We present the quantitative results from some policy experiments previously computed in the literature, first in the context of stationary demographics and then with an ageing population, and highlight the key policy prescriptions that we learn from these experiments. We conclude by providing some directions for future research.
ISSN:0266-903X
1460-2121
DOI:10.1093/oxrep/17.1.20