Sep 28, 2017 term paper 2

SOCIAL SECURITY REQUIRES MANDATORY PARTICIPATION IN MOST COUNTRIES. MILTON FRIEDMAN (1999) STATES…

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Social security requires mandatory participation in most countries. Milton Friedman (1999) states that ‘‘The fraction of a person’s income that is reasonable for him or her to set aside for retirement depends on that person’s circumstances and values. It makes no more sense to specify a minimum fraction of income that must be spent on housing or transportation.’’ Discuss the possible implications of making participation in social security voluntary. You can also use arguments of adverse selection and moral hazard covered in chapter 9


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