Tax-Favored Retirement Accounts: Are they Efficient in Increasing Savings and Growth? - 10.1628/001522108X334830 - Mohr Siebeck
Wirtschaftswissenschaft

Hans Fehr, Christian Habermann, Fabian Kindermann

Tax-Favored Retirement Accounts: Are they Efficient in Increasing Savings and Growth?

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Jahrgang 64 () / Heft 2, S. 171-198 (28)

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The paper aims to assess tax-favored retirement accounts in a general-equilibrium overlapping-generations economy with idiosyncratic income risk and borrowing constraints. Our simulations indicate that tax-favored retirement accounts as implemented in many OECD countries will have a significant impact on savings and transitional capital accumulation. In our most preferred specification, the latter will rise by roughly 6%, while about 22% of retirement account contributions are additional savings. While existing generations are worse off, future generations benefit significantly from higher bequests, higher wages, and lower tax burdens. However, since the reform also alters the insurance provision of the tax system, aggregate efficiency effects are mostly either negative or insignificant. Finally, it turns out that withdrawal penalties and tax-exempted accounts have positive growth and distributional implications.
Personen

Hans Fehr Born 1962; 1983–89 studied economics at the University of Regensburg and Boulder/Colorado; 1989–98 wiss. Assistent at the Universities of Regensburg and Tübingen; 1992 Promotion; 1998 habilitation.

Christian Habermann Keine aktuellen Daten verfügbar.

Fabian Kindermann Geboren 1984; 2008 Diplom-Wirtschaftsmathematiker; 2008–12 Wissenschaftlicher Mitarbeiter am Lehrstuhl für Finanzwissenschaft an der Universität Würzburg; 2012 Promotion; von Oktober 2012 bis September 2013 Forschungsaufenthalt an der Northwestern University, Evanston, IL, USA.