Journal Article

Time-Inconsistent Preferences and Social Security

Ayşe İmrohoroğlu, Selahattin İmrohoroğlu and Douglas H. Joines

in The Quarterly Journal of Economics

Published on behalf of President and Fellows of Harvard University

Volume 118, issue 2, pages 745-784
Published in print May 2003 | ISSN: 0033-5533
Published online May 2003 | e-ISSN: 1531-4650 | DOI: https://dx.doi.org/10.1162/003355303321675509
Time-Inconsistent Preferences and Social Security

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In this paper we examine the role of social security in an economy populated by overlapping generations of individuals with time-inconsistent preferences who face mortality risk, individual income risk, and borrowing constraints. We find that unfunded social security lowers the capital stock, output, and consumption for consumers with time-consistent or time-inconsistent preferences. However, it may raise or lower welfare depending on the strength of time inconsistency.

Journal Article.  0 words. 

Subjects: Economics

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