social security liquidity constraints and pre retirement consumption one of the primary goals of the social security retirement program is the maintenance of consumption in old age in the past decade since the pioneering paper by feldstein 13 studies have examined the impact of the system on consumption over the entire life cycle and not just in old age empirical work has tested the impact on consumption of the individual wealth transfers accompanying the introduction of a pay as you go social security system extending this discussion of the impact of social security on pre retirement consumption hubbard 21 has shown in the context of lifetime uncertainty that even an actuarially fair fully funded social security system can raise lifetime consumption hence previous partial equilibrium estimates of the impact of social security on consumption drawn solely from consideration of the intergenerational wealth transfer at the introduction of the system are underestimates of the potential effect 2 an important assumption in the approaches cited above is that of perfect capital markets i e that individuals can borrow against prospective gains from participating in the social security system such an assumption is at variance with actual limitations on borrowing e g upward sloping interest rate schedules collateral requirements and quantity restrictions hayashi 18 found that approximately twenty percent of all consumption in the u s is accounted for by liquidity constrained consumers 3 flavin 16 found that the estimate of the marginal propensity to consume is affected dramatically by the inclusion of proxies for liquidity constraints suggesting that liquidity constraints are an important part of the observed excess sensitivity of consumption to current income since its inception in 1935 old age and survivors insurance oasi provided

the effect of annuity insurance on savings and inequality this paper examines the amount of precautionary savings and wealth inequality arising from life span uncertainty by comparing saving behavior under perfect insurance arrangements with that arising under imperfect arrangements namely when longevity risk can be pooled only with members of one s own family the central findings of the paper are that 1 perfecting insurance arrangements can sharply lower savings in both intergenerationally altruistic and life cycle economies and that 2 in altruistic economies perfecting annuity insurance can greatly influence inequality indeed in the long run in our model switching from imperfect family insurance to perfect insurance can mean the difference between absolute inequality and absolute equality

aggregate and distributional effects of fair social security abstract in an overlapping generations economy with production endogenous labor supply a bequest motive and uncertain lifetime we show that a fair fully funded social security program reduces the aggregate levels of output employment capital and savings we determine the necessary and sufficient conditions for this social security program to increase the inequality of the income distribution the conclusions apply to the entire non stationary competitive equilibrium path taken by the economy following the introduction of social security

the strategic bequest motive although recent research suggests that intergenerational transfers play an important role in aggregate capital accumulation our understanding of bequest motives remains incomplete we develop a simple model of strategic bequests in which a testator influences the decisions of his beneficiaries by holding wealth in bequeathable forms and by conditioning the division of bequests on the beneficiaries actions the model generates falsifiable empirical predictions that are inconsistent with other theories of intergenerational transfers we present econometric and other evidence that strongly suggests that bequests are often used as compensation for services rendered by beneficiaries

income uncertainty and the demand for annuities abstract two well known results concerning the demand for annuities in an overlapping generations model are i egoistic agents should annuitize all their wealth and ii altruistic agents should segment their savings between riskless bonds for bequests and annuities for own consumption this paper extends the analysis by considering income uncertainty it is shown that while the segmentation result holds under future generation s income uncertainty fgiu altruistic agents do not segment their savings in the presence of second period income uncertainty spiu the intuition for this result is that income uncertainty in the second period of life is contingent on being alive and therefore at the optimum the covariance between one s offspring s consumption and life uncertainty is not zero as in the case of certainty and fgiu the effects of precautionary savings on the demand for annuities are also analyzed

optimal long run fiscal policy constraints preferences and the resolution of uncertainty we construct a computational dynamic stochastic overlapping generations general equilibrium model with uncertain lifetimes and explore the impact of policy stickiness specifically a major reform will preclude future reforms for a generation on optimal long run fiscal policy under such circumstances entitlement reforms exhaust a valuable option to move in the future we explore the conditions under which the gain to waiting is large enough to induce optimizing policymakers to delay reforming a suboptimal system we also allow for the uncertainty to have arch characteristics and explore the impact of time varying uncertainty on the optimality of delayed policy action

intergenerational aspects of public transfers borrowing and debt the paper analyzes intergeneration distributional effects of taxes transfer payments public borrowing and debt a two period life cucle model with overlapping generations is constructed the model has two specific features private wealth in both periods enter as arguments in the preference function and the individuals inelastically supply labor in both periods it turns out that some fiscal policy actions favor both of the currently lliving generations possibly at the expense of future generations while other actions generate conflicts between the currently living generations the analysis also shows that it makes considerable difference whether the burden of public spending debt and borrowing is defined in terms of wealth consumption and utility the different implications of foreign vs domestic debt are examined

pay as you go social security and the distribution of altruistic transfers this paper studies the impact of an unfunded social security system on the distribution of altruistic transfers in a framework where savings are due to both life cycle and random altruistic motivations we show that the effect of social security on the distribution of these transfers depends crucially on the strength of the bequest motive in explaining savings behaviour we measure this strength by the expected weight that individuals attach to the utility of future generations on the one hand if the bequest motive is strong then an increase in the social security tax raises the bequests left by altruistic parents on the other hand when the importance of altruism in motivating savings is sufficiently low the increase in the social security tax could result in a reduction of the bequests left by altruistic parents under some conditions on the attitude of individuals toward risk and on the relative returns associated with private saving and social security some implications concerning the transitional effects of introducing an unfunded social security scheme are also discussed

longevity and public old age pensions i introduction conventional economic analysis of intertemporal or intergenerational resource allocation takes longevity as exogenously determined by biological or technological factors within this framework the institution of a mandatory public old age pensions of a pay as you go type unambiguously reduces capital accumulation the intuition behind this result is that when the young expect an old age pension after retirement and at the same time pay an earmarked payroll tax that lowers disposable income the ability and the incentive to save are reduced such a result however ignores the possibility that an individual who has a survivorship contingent title to an old age pension might use resources to increase the likelihood of survival to acquire the promised pension the fact that over the past century both longevity and the size of old age pensions have risen suggests that a more complete model that incorporates longevity as a choice variable may be useful in understanding the simultaneous increase in longevity and old age pensions ehrlich and chuma 1990 consider the demand for longevity in a world where the certain length of life is a fixed function of health care expenditures thus making longevity endogenous in their model consumers choose the optimal depreciation rate for human capital by choosing the path of health care expenditures their work paves the way for consideration of the effect of longevity contingent property rights on behavior in a more recent paper philipson and becker 1998 build on the work of ehrlich and chuma by modeling longevity contingent claims in the form of old age pensions among other things they find that an increase in a longevity contingent old age pension will induce individuals to live longer as a result of this longer life philipson and becker question the traditional result that pay as you go old age pensions always reduce the capital stock because workers who choose greater longevity may also choose to save more during their working years to finance their longer retirement period in this paper we introduce endogenous and uncertain lifetime into a two period overlapping generations olg model we depart from the traditional diamond type olg model by measuring longevity as the probability of survival into the second period and by allowing individuals to affect their survival probability through spending on longevity extending activities within this framework we examine the effects of a pay as you go old age pension on longevity and capital accumulation under two polar assumptions concerning the existence and absence of a fair intragenerational annuity market in either case the longevity effect of an increase in the old age pension is neutral while the capital stock effect is strictly negative if the interest rate and population growth rate are equal e g if the economy is on a golden rule path surprisingly increasing the old age pension produces both a negative longevity and savings effect for the more relevant case where the interest rate is larger than the population growth rate that an increase in the old age pension produces a negative capital stock effect is anticipated but the neutral or negative effect on longevity is counterintuitive it is counterintuitive because the empirical evidence seems to show lockstep increases in both longevity and government provided retirement benefits in the form of pensions and heath care benefits furthermore longevity insurance conjures up the moral hazard problem where increased utilization is expected with government provision the funding pool expands with use the cost being borne by workers the fact that the workers bear the burden of increasing the old age pension helps explain the longevity results we obtain when the population grows at the same rate as the return on capital an increase in the pension is offset by a dollar for dollar reduction in private savings leaving second period consumption unchanged

income uncertainty bequests and annuities abstract life uncertainty and income uncertainty are modeled simultaneously in order to analyze the influence of perfecting income insurance in the size of bequests and the demand for annuities the main result shows that government intervention aimed at providing intergenerational risk sharing acts as a bequest substitute and if annuities are available reduces the demand for annuities

how do journal quality co authorship and author order affect agricultural economists salaries utilizing an original data set containing annual salaries and peer reviewed publication histories for 326 faculty members from top ranked ph d granting programs we examine the labor market for academic agricultural economists the results suggest that higher quality publications have a greater impact on annual earnings that sole authored articles have a higher return than multi authored articles and that no wage premium exists for being the lead author of a non alphabetic article

population uncertainty social insurance abstract uncertainty in the size of the working population leads to uncertainty in wages and in the return to capital and to the possible desirability of an insurance contract between unborn workers and future retirees however green 1977 1988 finds that an insurance contract is unlikely to benefit both generations we show that a worker has two potential sources of actuarial bias green s result is due to workers in his model being of different types and some workers having only one source of bias a representative worker must have both sources of bias and an insurance contract will benefit both generations the results are generalized

uncertainty and optimal social security systems this paper examines the annuity aspect of social security within the framework of an overlapping generations model the duration of life is assumed to be uncertain under a fully funded system demand for social security is determined by each generation so as to maximize expected lifetime utility taking into account the welfare of future generations under a pay as you go system with intergenerational transfers demand for retirement benefits by the working population takes into account taxes paid by descendants it is shown that the two modes of finance are equivalent in terms of all real aggregates effects of changes in expected lifetime and in the birth rate are analyzed starting at the optimal level a compulsory balanced increase in social security taxes and benefits is shown to increase short run savings

the distribution of wealth and welfare in the presence of incomplete annuity markets this paper examines the implications of the absence of complete annuity markets on the distribution of wealth and welfare of agents whose saving decisions are obtained under uncertainty regarding the length of their life the absence of annuities is shown to yield a unique nondegenerate intragenerational distribution of wealth which is fully characterized this characterization is then used to evaluate the pareto desirability of an annuity system alternative welfare criteria that can be used when the proposed change has differential impacts on the initial state of subsequent generations are considered

education social security and growth abstract we study the role of government s allocation of tax revenues between two outlays public investment in education a transfer to the young generation and social security benefits to the older generation in an overlapping generations economy with pay as you go social security and altruistically motivated transfers from parents to children we analyze how the allocation of the tax revenues between the two outlays affects growth and welfare in competitive equilibria a we obtain comparative dynamics results for nonstationary equilibria subject to a change in the allocation profile b for stationary equilibria we show that for a given allocation profile of the tax revenues educational subsidies can either increase the growth rate or decrease it depending on the parameters of the model preferences production function and the tax rate c if government seeks to allocate funds in a way that maximizes the growth rate we demonstrate that under some plausible conditions it is not optimal to maintain pay as you go social security however if parents preferences combine strong concern for their retirement with significant degree of altruism towards their children then pay as you go social security system does enhance growth and welfare

uncertain lifetimes and the welfare enhancing properties of annuity markets and social security this paper explores the implications of social security programs and annuity markets through which agents who are characterized by different distributions of length of lifetime share deathrelated risks when annuity markets operate a non discriminatory social security program affects only the intragenerational allocation of resources in the absence of private information regarding individual survival probabilities such a program will lead to a non optimal intragenerational allocation of resources however the presence of adverse selection considerations gives rise to a pareto improving role for a mandatory non discriminatory social security program

should social security benefits be means tested social security retirement benefits distort the saving decisions of workers who are rational enough to save for their future since the implicit rate of return in an unfunded social security program is less than the marginal product of capital the resulting decline in saving causes a welfare loss the present paper examines the conditions under which the welfare loss could be reduced by replacing the current universal social security program with a means tested program that pays benefits only to those individuals with little or no other retirement income or assets every society must solve the problem of supporting those individuals who become too old to work but have not made adequate provision for their own old age by saving when they were young at the present time the major industrial countries of the world have responded to this problem by creating social security programs that tax the working population and use the proceeds to provide a universal benefit to all retirees regardless of their financial condition this universal provision of social security benefits distorts the saving decisions of those workers who are rational enough to plan for the future since the implicit rate of return that taxpayers get on their this research is part of the nber study of the government budget and the private economy a more complete version of this paper with some numerical calculations is available as nber working paper no 1775 feldstein 1985b i am grateful to gilbert metcalf for assistance with the calculations presented in this paper and for helpful discussions for a discussion of the effect of promised retirement benefits on the savings of employees see feldstein 1974 1982 barro 1974 1978 has discussed an interesting

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

social security and endogenous growth abstract this paper examines the effects of social security on the steady state growth of per capita income in an endogenous growth model in which agents care about their own consumption the number of children and the welfare of each child it shows that an unfunded program may simulate growth by reducing fertility and increasing the ratio of human capital investment per child to per family income when bequests are positive also it may cause faster growth than funded programs especially when receipts from funded programs are independent of contributions when voluntary saving is positive funded social security is neutral if receipts are linked to contributions and most likely depresses growth if receipts are independent of contributions

saving social security and uncertainty since alteration of the saving behavior of the present working generation may have such a significant impact on capital stock growth some concern has arisen about the effect of the social security system on saving behavior in response to this concern numerous empirical and theoretical analyses have been forthcoming most of the theoretical analyses either in the form of overlapping generations models 9 11 or simpler life cycle models 6 15 have indicated that unless specific parameter values utility functions and in some cases production functions are chosen the effect of a social security system on saving is indeterminate for example kurz 11 has shown that the introduction of a simple pay as you go social security system in an overlapping generations model in which individuals do not have a leisure choice will not have a predictable effect on the steady state level of the capital stock unless parameter values and the form of the production function are known similarly in life cycle models that include a leisure choice the effect of social security is difficult to determine although feldstein 6 shows that when the leisure choice is suppressed in such a model a social security system will have a negative impact on saving this indeterminacy has not been completely resolved by empirical work although the bulk of evidence 7 8 10 12 tends to support the view that social security has depressed saving in the past unfortunately with the exception of the work of sheshinski and weiss 16 little of the theoretical analysis deals with the effect on saving behavior of participants who are faced with uncertainty about future prices wages and social security benefits sheshinski and weiss have shown that in an overlapping generations model with uncertain lifetimes the effect of increasing the role of social security through balanced increases in benefits and contributions will actually lead to an increase in saving their analysis however does not include a leisure choice nor does it deal with other forms of uncertainty facing participants consequently we still lack more complete answers to the following basic questions will the introduction of a social security program in the presence of uncertainty

social media for socially responsible firms analysis of fortune 500 s twitter profiles and their csr csir ratings the instrumental benefits of firm s csr activities are contingent upon the stakeholders awareness and favorable attribution while social media creates an important momentum for firms to cultivate favorable awareness by establishing a powerful framework of stakeholder relationships the opportunities are not distributed evenly for all firms in this paper we investigate the impact of csr credentials on the effectiveness of social media as a stakeholder relationship management platform the analysis of fortune 500 companies in the twitter sphere reveals that a higher csr rating is a strong indicator of an earlier adoption a faster establishment of online presence followers a higher responsiveness to the firm s identity replies and mentions and a stronger virality of the messages retweets incidentally the higher csir rating is also found to be associated with the stronger virality our findings also suggest that socially responsible firms can harvest proactive stakeholders participation user driven communication without investing more resources firm driven communication as the first study that conceptualizes the social media as a proponent of csr this paper contends that being socially responsible makes more practical sense for firms with the rise of social media

uncertain health and survival effects on end of life consumption this article analyzes the impact of health and survival uncertainty on the saving and consumption decisions of retirees a dynamic programming approach is used to model the household s planning problem the utility parameters are estimated using panel data we find that a fall into poor health raises the marginal utility from consumption simulations are used to indicate the effects of falling into poor health and loss of spouse they reveal a large transfer from the healthy to the sick partner and a strong dependence of saving on the survivor benefits suggesting that concern about the surviving spouse is an important motive for saving

gender segregation in the academic staff of universities in great britain 1980 81 1993 94 this paper analyses gender segregation within the academic staff of universities in great britain over the period 1980 81 1993 94 it finds that the level of gender segregation increased as measured by the karmel maclachlan index ip using a decomposition procedure it is possible to identify the composition effect which is the contribution of a change in the gender ratio of individual academic levels to the overall change in the level of segregation this was found to have decreased over the 12 years indicating that each grade of appointment became less segregated however the decline in segregation at each level of academic employment was six times greater in us institutes of higher education the small extent of improvement in great britain focuses attention on the perceived lack of effectiveness of equal employment opportunity policy and programmes within the university sector identified by both the commission for racial equality and the hansard society

uncertain inflation and social security indexation abstract this paper provides a theoretical analysis of the effects of the insurance feature of social security indexation on portfolio allocation and the stability of income and consumption of the retiree within the framework of a life cycle model of allocation under uncertainty the paper shows that the magnitudes of such effects depend on the importance of social security in total wealth the covariance of real portfolio returns with the inflation rate and more importantly whether there exists market failure in providing for inflation insurance