How will the distribution of welfare, consumption and leisure across households be affected by social security reform? This paper addresses this question for social security reforms with a two-tier structure by comparing steady states under a realistic version of the current US system and under...

Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as...

We analyze the insurance provided by the U.S. social security and income tax system within a model in which agents receive idiosyncratic, wage rate shocks that are privately observed. We consider two reforms: a piecemeal reform that optimally chooses the social security benefit function and a...