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Title:Sosiaalitilit ja moraalikato PDF Logo
Authors:Lassila, Jukka
Valkonen, Tarmo
Issue Date:2009
Series/Report no.:ETLA discussion paper 1181
Abstract:Moral hazard means that people with insurance may take greater risks because they know they do not bear the full consequences of their actions. This can occur with both private insurance and social insurance. Deductibles can be used to alleviate the problem. An interesting way to bring deductibles into social insurance is to establish individual social accounts. Mandatory payments into individual social accounts that finance social insurance payments replace taxes that are currently financing social-insurance benefits. At retirement, the remaining balances in the accounts are paid to account holders or added to their retirement benefits. If the account balance is negative at that time, the account is set to zero. The report considers individual unemployment accounts, including severance payments accounts and employment bonuses, and health and long-term care accounts.
Subjects:Social insurance
moral hazard
individual social accounts
JEL:H53
H55
Document Type:Working Paper
Appears in Collections:ETLA Discussion Papers, Research Institute of the Finnish Economy

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