Four options to make the social security sustainable under the coming demographic shift are presented; increase payroll taxes by 6 percentage points, reduce replacement rates by one-third, raise the normal retirement age to 73, or means-test the benefits and reduce them in income. The paper...

In this paper we quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks, where households also differ permanently with respect to their ability to generate income. The welfare criterion we employ is...

This paper studies the effect of demographic transitions on the economy of Latin America and the Caribbean (LAC). The paper builds a model of multi-regions of the world and derives the path of macroeconomic variables including aggregate output, capital, labor and the saving rate as economies...

The U.S. tax policy on health insurance is regressive because it favors only those offered group insurance through their employers, who tend to have a relatively high income. Moreover, the subsidy takes the form of deductions from the progressive income tax system, giving high-income earners a...

In this paper we quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic, uninsurable income shocks, where households also differ permanently with respect to their ability to generate income. The welfare criterion we employ is...

A general equilibrium life-cycle model is developed, in which individuals choose a sequence of saving and labor supply faced with search frictions and uncertainty in longevity, health status and medical expenditures. Unemployed individuals decide whether to apply for disability insurance (DI)...

To understand trans-Atlantic employment experiences in the post-World War II era, we enrich the environment of Ljungqvist and Sargent (2008) in ways that allow skill losses occasioned by involuntary job separations (`turbulence') to have further effects on labor market outcomes. Our model...

The reform improves long-run welfare and the majority of current generations would experience a welfare gain from a transition to the reformed system.

The paper builds a life-cycle model of heterogeneous agents with search frictions, in which individuals choose a sequence of saving and labor supply faced with uncertainty in longevity, employment, health status and medical expenditures. Unemployed individuals decide search intensity and whether...

In this paper we build a micro-data based, large-scale overlapping generations model for Japan in which individuals differ in age, gender, employment status, income, and asset holdings, and incorporate the Japanese pension rules in detail. We estimate age-consumption and age-earnings profiles...