Full Citation

Title: The Joint Effects of Social Security and Medicaid on Incentives and Welfare

Citation Type: Miscellaneous

Publication Year: 2013

ISBN:

ISSN:

DOI:

NSFID:

PMCID:

PMID:

Abstract: We evaluate the effects of Social Security and Medicaid reform on individual behavior, fiscal expenditures and welfare in an environment with idiosyncratic risk in labor earnings, medical expenses, spousal death, and survival. In our model, a progressive Social Security program and means-tested transfer program (Medicaid/SSI) provide insurance against lifetime earnings, health expense, survival and spousal death risks. We document important interactions between Social Security and means-tested welfare programs for the elderly. Eliminating Social Security would nearly double the fraction of retired households who choose to rely on means-tested transfers to finance medical care and consumption in old-age. Despite this, newly formed households would prefer to be in an economy with no Social Security. Newly formed households like Medicaid and would prefer to be in an economy with a more generous program that is funded by a higher payroll tax. Medicaid, insures health and medical expense risk and also provides partial insurance against spousal death and longevity risks.

User Submitted?: No

Authors: Koreshkova, Tatyana; Braun, Anton; Kopecky, Karen A.

Publisher: Federal Reserve of Atlanta

Data Collections: IPUMS USA

Topics: Aging and Retirement, Health, Other, Poverty and Welfare

Countries: