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Title:Is social security behind the collapse of personal saving? PDF Logo
Authors:Caliendo, Frank N.
Issue Date:2009
Series/Report no.:CESifo working paper 2746
Abstract:This paper considers the quantitative role of growth in the size of the social security program in contributing to the collapse of personal saving in the U.S. over the last few decades. Using a calibrated, general equilibrium life-cycle model this paper shows that social security may not be to blame. Specifically, the model predicts that a 50-percent increase in the social security tax rate (as in the U.S. over the last half century) produces a modest decline in the personal saving rate from 10 percent down to 9.6 percent. This result runs counter to some popular opinion.
Subjects:NIPA personal saving rate
social security
life-cycle permanent-income model
general equilibrium calibration
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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