Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76603
Authors: 
Bovenberg, Lans
Sørensen, Peter Birch
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper 1041
Abstract: 
In the modern welfare state a substantial part of an individual's tax bill is transferred back to the same individual taxpayer in the form of social transfers. This provides a rationale for financing part of social insurance through mandatory savings accounts. We analyze the behavioral and welfare effects of compulsory savings accounts in an intertemporal model with uncertainty, endogenous involuntary unemployment and retirement decisions, credit constraints, and heterogeneous agents. We show that the introduction of (early) retirement and unemployment accounts generates a Pareto improvement by enabling the government to provide lifetime income insurance and liquidity insurance in a more efficient manner.
Document Type: 
Working Paper

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