Title: Social Security in an Overlapping Generations Economy with Land
Abstract: We use balance sheet and National Income and Products Accounts data to calibrate factor shares in a model with three factors (land, labor, and capital) and three sectors (business, household, and government). These estimates are used in an overlapping generations model with land to study the long-run implications for social security. In this setup, dynamic inefficiency is theoretically ruled out due to the presence of land as a fixed factor of production. Our numerical experiments suggest that in this setup the partial insurance benefit provided by an unfunded social security system is outweighted by the reduction in aggregate long-run consumption that accompanies such a system. This negative finding for social security seems to be robust to different parameterizations of the model economy. Journal of Economic Literature Classification Numbers: E2, E6, D52, C68.
Publication Year: 1999
Publication Date: 1999-07-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 132
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