Premium
A Note on Means Testing and Temptation
Author(s) -
Kumru Cagri S.,
Piggott John,
Thanopoulos Athanasios C.
Publication year - 2019
Publication title -
economic papers: a journal of applied economics and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 19
eISSN - 1759-3441
pISSN - 0812-0439
DOI - 10.1111/1759-3441.12262
Subject(s) - temptation , welfare , control (management) , economics , pension , actuarial science , psychology , econometrics , public economics , social psychology , finance , management , market economy
This study analyses the relative performance in terms of welfare of the current US PAYG system compared to an array of cost equivalent alternative specifications of means‐tested pension programmes. We conduct our analysis under two different settings. While in the first setting, individuals have standard preferences; in the second setting, individuals have self‐control preferences. We show that the implications of the reform substantially differ across the two settings.