Footnote:
In: American Economic Review, Vol. 93, No. 9, 2003
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 1, 2003 erstellt
Description:
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. There have been arguments for or against converting the existing unfunded defined-benefit Social Security system into a two-tier program with both defined-benefit and funded individual-account segments. One of the arguments against introducing the second tier of individual accounts is the risks that their stock and bond investments would impose on Social Security participants — particularly low income and wealth households that do not otherwise participate in financial markets. 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