@techreport{Hurst2004Social,
abstract = {Most young households simultaneously hold both unsecured debt on which they pay an
average of 10 percent interest and social security wealth on which they earn less than 2 percent.
We document this fact using data from the Panel Study of Income Dynamics. We then consider
a life-cycle model with ?tempted? households, who find it impossible to commit to an optimal
consumption plan and ?disciplined? households who have no such problem, and we explore
ways to reduce this inefficiency. We show that allowing households to use social security
wealth to pay off debt while exempting young households from social security contributions
(but in both cases requiring higher contributions later) leads to increases in welfare for both
types of households and, for disciplined households, to significant increases in consumption
and saving and reductions in debt.},
author = {Erik Hurst and Paul Willen},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {330; Gesetzliche Rentenversicherung; Lebenszyklus; Private Verschuldung; Verbraucherkredit; Sch\"{a}tzung; USA},
language = {eng},
number = {04,10},
title = {Social Security and Unsecured Debt},
type = {Public policy discussion papers / Federal Reserve Bank of Boston},
url = {http://hdl.handle.net/10419/23456},
year = {2004}
}

