انتخاب کردن از تأمین اجتماعی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|24054||2004||12 صفحه PDF||سفارش دهید||4552 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Public Economics, Volume 88, Issues 7–8, July 2004, Pages 1295–1306
The liability facing a pay-as-you-go social security system can be calculated in several ways. Many conversions, including that which took place in Chile, and in many plans to convert the U.S. system, assume the largest measure, known as the ‘shutdown liability.’ This measure pays many workers who have contributed to the public system more money than the public system is actually worth to them, thereby placing a larger burden on future generations. But other liability measures are hard to implement due to an information asymmetry between the government and individuals about an individual’s skill level. This paper demonstrates that a very simple reform plan—simply letting people opt out of social security—generates a truthful revelation equilibrium in which agents reveal private information about their skill levels. The new assumed liability measure is much smaller since it more accurately assigns a liability to each individual. A smaller liability, therefore, is passed onto future generations, which also generates quicker transition paths. It also does a better job protecting the welfare of the initial elderly when general revenue is used to pay for the transition. Simulation evidence is provided using a large-scale lifecycle model with heterogeneous skill levels.
Chile, when it converted its pay-as-you-go social insurance system to individual defined-contribution accounts, recognized previous contributions made by workers under the public insurance system by crediting contributions with a 4% real annual interest rate. People who were retired at the time of the reform continued to collect benefits under the old system. Credits were distributed to workers in the form of ‘recognition bonds’ that were placed in each worker’s new individual account. Bonds are paid off using general revenue when the worker retires. Many analyses of converting the U.S. Social Security system to individual funded accounts also phase out Social Security benefits based on former contributions. See Feldstein (1975), Seidman (1986), Arrau and Schmidt-Hebbel (1993), Feldstein (1995), Kotlikoff (1996), Kotlikoff et al. (1997), Altig and Gokhale (1997), Feldstein and Samwick (1997), and Huang et al. (1997). Participation in the new system is generally mandatory in these plans, presumably to avoid adverse selection. Gustman and Steinmeier (1995) consider partial-equilibrium responses to allowing people to choose between private saving and social security. To be sure, the focus on previous contributions is understandable since that measure can be easily calculated. But this measure overpays many participants: for many younger and richer agents, remaining in social security is actually a bad deal since the present value of their future benefits is smaller than the present value of their future social security taxes. Paying these agents money to recognize their previous contributions, therefore, gives them more than social security is actually worth to them. In fact, these agents should be willing to pay to get out of social security. A more accurate measure of social security’s worth to each person would be based on prospective contributions and benefits, not past contributions. But it’s hard for the government to calculate a prospective value of social security for each person. As in the optimal tax literature started by Mirrlees (1971), suppose that each agent knows his or her own lifetime skill level which is drawn from a distribution of lifetime skill levels. The government, though, only observes each agent’s endogenous wage income, not hours worked. So each agent’s lifetime skill level is private information. 1 But to project future labor earnings, the government must know an agent’s skill level since two agents with similar earnings histories can belong to different lifetime income classes. An agent with a high eventual lifetime income could have low earnings during his or her early working years due to heterogeneity in skill profiles caused by education, heterogeneous bequests and a progressive social security system also play roles. Future earnings would especially be difficult to project for younger workers with a limited work history. So, not surprising, past plans to convert social security to individual accounts make no effort to calculate prospective taxes and benefits. This paper demonstrates that a simple reform plan—simply letting people opt out of social security—does a better job at identifying the winners and losers under social security relative to the common liability measure based on previous contributions. An agent who opts out no longer faces future payroll taxes but also forfeits any accrued benefits: they simply drop out. While, politically, it might seem impossible at first to offer people a deal in which they forfeit accumulated benefits, it is shown below that many workers would benefit from such a deal. An agent will opt out if the present value of their remaining social security taxes exceeds benefits. Opting out is not perfect: agents with a negative present value do not have to pay their way out of social security. However, social security’s liability stemming from those who remain in social security is potentially much less than the liability based on previous contributions. Future workers, therefore, face a smaller burden since many current workers are no longer being overpaid. The transition to the new steady state, therefore, is also quicker. Moreover, interestingly, if general revenue is being used to finance the transition, as in Chile and with many other plans, the opting out approach can be even more successful in protecting the welfare of the initial elderly. Section 2 presents the math of social security liabilities using a simple three-period OLG model. Section 3 presents simulation evidence using a large-scale simulation model with heterogeneous skill levels. Section 4 concludes.
نتیجه گیری انگلیسی
To be sure, the usual ‘no free lunch’ principle of social security reform still applies. But by better matching what the system owes each worker with how much each worker actually values remaining in social security, the opting out approach avoids transferring additional burdens to future generations, which can produce more favorable macroeconomic and distributional outcomes. Our analysis was predicated on the usual assumption in which agents make rational and fully informed decisions. In reality, some people might optimize incorrectly, requiring some safeguards. The most obvious safeguard would be to restrict participation to those below the real-life age 35 or so.