Coping with rational prodigals: A Theory of Social Security and Savings Subsidies
| Title: | Coping with rational prodigals: A Theory of Social Security and Savings Subsidies |
|---|---|
| Authors: | Stefan Homburg; Jel-classification H H |
| Contributors: | The Pennsylvania State University CiteSeerX Archives |
| Source: | http://www.wiwi.uni-hannover.de/forschung/diskussionspapiere/dp-293.pdf. |
| Publication Year: | 2004 |
| Collection: | CiteSeerX |
| Subject Terms: | Social Security; Pensions; Subsidies; Optimal Taxation |
| Description: | The rational prodigality argument, which often serves to justify social security, is considered in a second-best tax framework with endogenous labor supply. Rational prodigality renders the familiar policies time inconsistent. We analyze time consistent policies and show that a wage tax suffices to rule out prodigality as a rational strategy. However, using savings subsidies, the solution can be improved upon. The subsidies are shown to be decreasing in income. A social security system with increasing contributions is needed in neither case. Revised version published in: Economica 73 (2006), pp. 47 ff. |
| Document Type: | text |
| File Description: | application/pdf |
| Language: | English |
| Relation: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.129.6246 |
| Availability: | http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.129.6246; http://www.wiwi.uni-hannover.de/forschung/diskussionspapiere/dp-293.pdf |
| Rights: | Metadata may be used without restrictions as long as the oai identifier remains attached to it. |
| Accession Number: | edsbas.789E431A |
| Database: | BASE |