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Economic Analysis of Social Security Survivors Insurance

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  • Li, Yue

Abstract

This paper develops a heterogeneous agents model to analyze the effects of Social Security survivors insurance. The model features a negative mortality-income gradient, asymmetric information of individual mortality rates, and a warm-glow bequest motive that varies by age and family structure. The model matches lifecycle changes in life insurance coverage, and generates advantageous selection in the insurance market. For male agents, reducing survivors benefits for dependent children generates welfare losses, while reducing survivors benefits for aged spouses produces welfare gains. The opposing welfare results are explained by differences in the timing of benefits and in the funding cost.

Suggested Citation

  • Li, Yue, 2017. "Economic Analysis of Social Security Survivors Insurance," MPRA Paper 84038, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:84038
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    References listed on IDEAS

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    Cited by:

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    3. Erin Cottle Hunt & Frank N. Caliendo, 2022. "Social security and longevity risk: An analysis of couples," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(3), pages 547-579, June.
    4. Artur Rutkowski, 2019. "Evaluating an old-age voluntary saving scheme under incomplete rationality," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 55-94.

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    More about this item

    Keywords

    Social Security; bequest motive; life insurance; asymmetric information;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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