Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252224 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15100
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study interactions between progressive labor taxation and social security reform. Increasing longevity puts fiscal strain that necessitates the social security reform. The current social security is redistributive, thus providing (at least partial) insurance against idiosyncratic income shocks, but at the expense of labor supply distortions. A reform which links pensions to individual incomes reduces distortions associated with social security contributions, but incurs insurance loss. We show that the progressive labor tax can partially substitute for the redistribution in social security, thus reducing the insurance loss.
Subjects: 
social security reform
labor income tax
redistribution
insurance
welfare effects
JEL: 
C68
D72
E62
H55
J26
Document Type: 
Working Paper

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