Premium
PRODIGALITY AND MYOPIA—TWO RATIONALES FOR SOCIAL SECURITY*
Author(s) -
PESTIEAU PIERRE,
POSSEN URI
Publication year - 2008
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2008.01086.x
Subject(s) - economics , social security , public economics , labour economics , microeconomics , market economy
Among the rationales for social security, there is the fact that some people have to be forced to save. To explain undersaving, rational prodigality and hyperbolic preferences are often cited but treated separably. In this paper we study those two particular behaviors that lead to forced saving within an optimal income tax second‐best setting.