Dissertation

Student Version of MATLAB
reveals that the quantitative predictions of the model are fairly robust with respect to the

underlying efficiency profile. As in the previous cases, the welfare-maximizing social security

tax rates under population aging are 2-5 percentage points higher than the baseline level.

The associated general equilibrium adjustments, similar to those in the initial baseline, lead

Table 3.18: Retirement age distributions under the different efficiency profiles.


Gross replacement rate
1 2 3 4 5 2001 CPS 61.48 63.09 63.61 63.86 64.02

Hansen (1993) 59.52 61.32 61.9 62.18 62.35