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| Author: | Nataraj, S. Shoven, J. B. |
| Title: | Comparing the Risks of Social Security with and without Individual Accounts |
| Journal: | American Economic Review
2003 : MAY, VOL. 93:2, p. 348-353 |
| Index terms: | SOCIAL ECONOMICS SOCIAL SECURITY PENSION SCHEMES |
| Language: | eng |
| Abstract: | The introduction of individual accounts as part of Social Security reform has received a great deal of attention in the United States and the rest of the world. The basic idea is that partial privatization would substitute risky individual accounts for safe defined- benefit plans. The purpose of this article is to evaluate the merits of that argument within the context of stylized two-tier plans. The authors suppose that two- tier programs make sense on pure risk-return efficiency grounds. They also think that the optimal structure for Social Security involves a substantial individual- accounts component, even for highly risk-averse participants. |
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