ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 1062
We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals' expected lifetime utility. Moreover, it also lowers the realized lifetime utilities of those at the bottom of the lifetime utility distribution.
Social security Retirement Means-testing Computational mod