Future improvements in mortality are difficult to forecast. In this paper, we incorporate uncertainty about future mortality, or aggregate mortality risk, into an otherwise standard life cycle model with an intertemporal consumption-savings decision. The aggregate mortality process is calibrated...

We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individualsŽ expected lifetime utility. Moreover, it also lowers the...

We analyze how changes in the mandatory pension system and the increasing life expectancy will affect the need for private retirement savings in Finland. The time horizon we consider is that of current young generations. We discuss private retirement savings from the point of view households,...

We compare different tax incentive schemes for private R&D investments using a numerical model of R&D-investments and firm dynamics. We find that tax incentives that are based on the incremental annual spending increase firms' R&D spending much more than tax incentives that are based on the...

We analyze how the tax treatment of voluntary retirement insurance has influenced individuals retirement decisions. Before 2005, the after-tax return to voluntary retirement savings was highest for those drawing their voluntary pensions before statutory pen-sions. This may have created an...

We study the extent to which retired households in Finland could supplement their mandatory pension benefits by releasing their equity. We also consider the tax treatment of different financial products that turn wealth into an income stream. In addition, we use a life cycle consumption-savings...