Public Policy Evaluation, Social Risk and Pension Capital

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Fascicle

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2006 - 3

Title

Public Policy Evaluation, Social Risk and Pension Capital

Author

Mordecai Kurz

Publisher

Vita e Pensiero

Format

Article |

Pdf

Online from

07-2006

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

Today’s demand for social insurance is supported by economic reasoning showing that private insurance markets do not provide efficient coverage for medical insurance, for inter-generational risk sharing and for income instability. It is unfashionable to say but government intervention in these areas is the solution and Conservative economic ideology is the problem. Hence, policy in the 21th century will focus on publically managed social insurance. In studying the problem of Social Security, I show it arises from changing demography which generated a deficit. Study of proposed solutions lead me to four conclusiones: (i) Privatization of Social Security is infeasible since system has a «Legacy Debt» of $11.6 trillion. (ii) Proposals to privatize Social Security are ideologically motivated and offer no real solution. (iii) Privatization is undesirable since it is not optimal to rely entirely on the markets to determine retirees’ incomes. Volatility of financial markets will result in unacceptable inter-generational income inequality.