Endogenous Longevity and Optimal Tax Progressivity

Heer, Burkhard; Rohrbacher, Stefan

doi:10.2139/ssrn.3731988

Cited by 2 publications

(2 citation statements)

References 35 publications

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“…Fourth, there is a large literature investigating optimal tax progressivity (e.g., Conesa and Krueger, 2006;Heathcote, Storesletten and Violante, 2017;Jung and Tran, 2020;Heer and Rohrbacher, 2021) and the effects of tax progressivity on tax revenue, wealth equality and human capital accumulation (e.g., Holter, Krueger and Stepanchuk, 2019). While we do not focus on overall income tax progressivity, our experiments with the Social Security's benefit-earnings rule are essentially examining the implications of modifying the degree of redistribution implicit in Social Security.…”

Section: Related Literaturementioning

confidence: 99%

Health risk and the welfare effects of Social Security

Bagchi

Jung

2022

Macroecon. Dynam.

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We quantify the importance of idiosyncratic health risk in a calibrated general equilibrium model of Social Security. We construct an overlapping generations model with rational-expectations households, idiosyncratic labor income and health risk, profit-maximizing firms, incomplete insurance markets, and a government that provides pensions and health insurance. We calibrate this model to the US economy and perform two computational experiments: $\left (i\right)$ cutting Social Security’s payroll tax, and $\left (ii\right)$ modifying Social Security’s benefit-earnings rule. Our findings suggest that health risk amplifies the welfare implications of both experiments: downsizing Social Security always leads to higher overall welfare, but the welfare gain is larger when we account for health risk, and increasing the progressivity of Social Security’s benefit-earnings rule has a larger positive effect on welfare in the presence of health risk. We also find that allowing households additional tools to self-insure against health risk weakens the precautionary motive, so our experiments have similar welfare implications both with and without health risk.

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Section: Related Literaturementioning

confidence: 99%

Health risk and the welfare effects of Social Security

Bagchi

Jung

2022

Macroecon. Dynam.

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“…Additional macro-health related studies includeSuen (2006),Hall and Jones (2007), DeNardi, French and Jones (2010),Feng (2010),Hugonnier, Pelgrin and St-Amour (2013),Scholz and Seshadri (2013),Zhao (2014),Capatina (2015),Yogo (2016),Ozkan (2017),Jung, Tran and Chambers (2017),Conesa et al (2018),Cole, Kim and Krueger (2018),Fonseca et al (2021), andHeer andRohrbacher (2021).7 We provide a more detailed description of the data sources as well as additional numerical and graphical results in an online appendix.…”

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confidence: 99%

Social health insurance: A quantitative exploration

Jung

Tran

2022

Journal of Economic Dynamics and Control

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Endogenous Longevity and Optimal Tax Progressivity

Cited by 2 publications

References 35 publications

Health risk and the welfare effects of Social Security

Health risk and the welfare effects of Social Security

Social health insurance: A quantitative exploration

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