Social Security Incidence under Uncertainty Assessing Italian Reforms
CESifo, Munich, 2009
CESifo Working Paper No. 2812
![](https://cesifo.org/DocImg/cesifo1_wp2812.jpg?c=1689236987)
This paper analyzes the welfare effects of the Italian social security system in an economy with uncertainty on wages, financial market returns and life expectancy. The introduction of a pension system reproducing the Italian statutory scheme turns out to decrease ex-ante individual welfare, unless restrictions are assumed on retirement behavior. Overall, risk insurance effects of social security play a minor role in determining welfare variations. The new Italian NDC pension system is shown to yield a slight ex-ante welfare improvement from a purely risk-insurance perspective. This relative gain stems from risk diversification across working-life wages in computing benefits.
Public Finance