Social Security and Private Savings: International Evidence in an Extended Life-Cycle Model

  • Martin S. Feldstein
Part of the International Economic Association Conference Volumes book series (IEA)


The extended life-cycle model shows that the impact of social security on private savings depends on two opposing effects: wealth replacement and induced retirement. The net impact can be determined only empirically. The current study uses data for a cross-sectional sample of developed countries so as to evaluate both effects. The evidence indicates that increases in the extent of social security coverage and in the relative level of benefits substantially depress the rate of private saving.


Social Security Saving Rate Private Saving Social Security Benefit Aggregate Saving 
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Copyright information

© International Economic Association 1977

Authors and Affiliations

  • Martin S. Feldstein
    • 1
  1. 1.Harvard UniversityUSA

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