Instructor's Manual IMChap011

《Instructor's Manual IMChap011》由会员上传分享，免费在线阅读，更多相关内容在教育资源-天天文库。

1、Part3–PublicExpenditure:SocialInsuranceandIncomeMaintenanceChapter11–SocialSecurityBriefOutline1.WhyHaveSocialSecurity?a.ConsumptionSmoothingandtheAnnuityMarketb.AdverseSelectionandtheAnnuityMarketc.OtherJustifications2.StructureofSocialSecuritya.BasicCo

2、mponentsb.DistributionalIssuesc.TheTrustFund3.EffectofSocialSecurityonEconomicBehaviora.SavingBehaviorb.RetirementDecisionsc.Implications4.Long-termStressesonSocialSecurity5.SocialSecurityReforma.MaintaintheCurrentSystemb.PrivatizetheSystem6.ConclusionsA

3、nswers1.Withadverseselection,insurancecontractswithmorecomprehensivecoveragearechosenbypeoplewithhigherunobservedaccidentprobabilities.Tomakeupforthefactthatabenefitismorelikelytobepaidtosuchindividuals,theinsurerchargesahigherpremiumperunitofinsuranceco

4、verage.2.Individualswhodonotsaveenoughfortheirretirementyearsmaybelievethatthegovernmentwillfeelobligedtocometotheiraidiftheyareinasufficientlydesperatesituation.Withthisbelief,youngerindividualsmaypurposelyneglecttosaveadequately.Onejustificationforthec

5、ompulsorynatureofSocialSecurityistoaddresstheinefficientlylowsavingcausedbymoralhazard.3.Usethebasicformulaforbalanceinapay-as-you-gosocialsecuritysystem:t=(Nb/Nw)*(B/w).Call1990year1and2050year2.Thent1=.267*(B/w)1t2=.458*(B/w)2Itfollowsthattokeep(B/w)1=

6、(B/w)2werequiret2/t1=.458/.267=1.71.Thatis,taxrateswouldhavetoincreaseby71percent.Similarly,tokeeptheinitialtaxrateconstant,wewouldrequire(B/w)2/(B/w)1=.267/.458=0.58.Benefitswouldhavetofallalmostbyhalf.11-3Copyright©2014McGraw-HillEducation.Allrightsres

7、erved.NoreproductionordistributionwithoutthepriorwrittenconsentofMcGraw-HillEducation.Part3–PublicExpenditure:SocialInsuranceandIncomeMaintenance1.ThesharpincreaseinthenumberofelderlymenwhomarryyoungwomenaffectsthesolvencyoftheBraziliansystembecause,afte

8、rtheearnerdies,thenon-earningspousecancontinuetoreceivepensionbenefits.Theyoungwomencollectformanymoreyearsthananoldernon-earningspouses,resultinginhigher-than-expectedpayouts.2.Austen’squoteseemslikeitcouldrelateadversese