This paper shows that improved intergenerational risk sharing in social security may imply very large welfare gains, amounting to up to 15 percent of the per-period consumption relative to the current U.S. consumption. Improved risk sharing raises welfare through a direct effect, i.e., by...

This paper concerns two issues related to optimal income taxation. First, we show how the labor income tax and the old age pension system interact in the optimal tax and expenditure structure. Second, we derive marginal capital income tax rates for high-ability and low-ability working...

In the present paper we examine the economic incentives to work for persons receiving benefits in Norway. We take into account how the tax- and benefit systems interact. For a large part of the population social security transfers ensure that the income if not working is far from zero. These...

We use structural estimation techniques to analyze labour supply effects of changes in economic incentives for individuals who have just finished vocational rehabilitation in Norway. The complicated and sometimes non-convex budget sets for this group are accounted for. Focus is also on the...

Lorsqu'on examine le choix du systeme de retraite (par la repartition de al capitalisation), on se preoccupe en general de l'effet sur l'epargne, le taux d'interet et les salaires d'equilibre, donc sur le niveau de capital par tete de l'economie; aussi du rendement relatif de la repartition et de...

The paper examines the possible effects of introducing a large-scale welfare reform in Sweden, namely, the introduction of comprehensive welfare accounts. Under this policy, individuals make mandatory contributions to accounts, which they can top up with voluntary contributions. In return,...

This paper explores the optimal risk sharing arrangement between generations in an overlapping generations model with endogenous growth. We allow for nonseparable preferences, paying particular attention to the risk aversion of the old as well as overall 'life-cycle' risk aversion. We provide a...

Social insurance for the elderly is judged responsible for the widely observed trend towards early retirement. In a world of laissez-faire or in a first-best setting, there would be no such trend. However, when first-best instruments are not available, because health and productivity are not...

Are there still opportunities for welfare-improving reforms in unfunded pension systems? To answer this question, we analyze the intertemporal structure of implicit taxes in pay-as-you-go pension schemes. We demonstrate that these tax rates are declining over the life cycle. This timing is...

We derive an ex post neutral comprehensive income tax on pension schemes equivalent to a Johansson-Samuelson tax that guarantees nondiscriminatory treatment of lifetime-dependent and other investments. By separately taxing contributions and benefits, our concept does not require any assumptions...