财政学第九章重点介绍.pptVIP

Chapter 9 – Social Insurance I: Social Security and Unemployment Insurance contents Why Have Social Security? Social Security Basic structure Redistribution Effects on behavior Policy problems and reforms Unemployment Insurance Social Insurance Programs Generally share four characteristics: Participation is mandatory Eligibility and benefits depend on prior contributions Benefits begin with an identifiable occurrence Programs are not means-tested Why Have Social Security? Consumption Smoothing How Social Security works Annuity(A contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement . Consumption smoothing Adverse Selection Asymmetric information Adverse selection Why Have Social Security? Asymmetric information one party has information that is not available to the other party. Adverse selection Individual who knows he is especially likely to collect benefits will have an especially high demand for insurance. 9th 229 8th230 She received the check, amounting to $22.54, on January 31, 1940. Fuller was born on a farm outside Ludlow, Vermont，working as a legal secretary. She retired in 1939, having paid just three years of payroll taxes. She received monthly Social Security checks until her death in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system. Why Have Social Insurance? Adverse selection In a perfectly competitive insurance market, expected profits will be driven down to $0. Adverse selection could lead to insurance plans losing money, and raising the premiums only exacerbates the adverse selection problem. Why Have Social Insurance? Adverse selection How can government intervention avoid adverse selection ? Social insurance programs are compulsory: the adverse selection problem is avoided because the low risks are forced to purchase the in