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Does Social Security Privatization Produce Efficiency Gains?
National Bureau of Economic Research [NBER]
Sept. 22, 2005
Excerpt: While privatizing Social Security can improve labor supply incentives, it can also reduce risk sharing when households face uninsurable risks. We simulate a stylized 50-percent privatization using an overlapping-generations model where heterogenous agents with elastic labor supply face idiosyncratic earnings shocks and longevity uncertainty.
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