An Evaluation of Social Insurance Savings Accounts

Abstract

Many countries have reformed, or plan to reform, their pension system, often replacing defined benefits with some sort of savings account. in recent years proposals have been made to apply personal savings accounts also to other elements of social insurance, such as unemployment insurance, social assistance or parental leave compensation. This paper evaluates the consequences of replacing these systems with an insured social insurance savings account. Effects on marginal tax levels and income distribution are analyzed using both income panel data for Sweden and a simulated sample.