Econ Final Social Insurance Programs Vocab List
rationales for social insurance policies (3)
lack of private markets, promotion of equity goals of society, paternalism
"intergenerational transfers"
occur because current benefits are paid by taxes of today's workers
"adverse selection"
occurs in insurance markets where those at greatest risk tend to demand more insurance than those at low risk
"intragenerational transfers"
occurs mostly due to transfers from high income individuals to low income individuals within a generation
"moral hazard"
occurs when policies promote behaviors that the policies themselves are supposed to control or prevent
social insurance programs
programs that provide benefits to individuals and families for loss of income due to retirement, disability, illness, and unemployment
unemployment insurance
provides benefits to laid-off workers
social security
provides benefits to retired and disabled workers and their dependents
medicare
provides for in-patient costs at hospitals and limited care
"trust funds"
specific funds set up to finance these programs
insurance function
the extent to which individual benefits are financed by payments of beneficiaries
transfer function
the extent to which individual benefits are paid by someone else
"pay-as-you-go"
when Social Security program is only required to have funds sufficient to meet its obligations in current year
social security deficits
when current benefit payments exceed taxes
"fully-funded"
when future pension payments are guaranteed by fact that contributors are invested/saved until recipients collect retirement benefits
negative transfer
when someone gets less than they otherwise would
positive transfer
when someone gets more than they otherwise would
social security surpluses
when taxes exceed current benefit payments
social security trust fund
where annual surplus IOUs are housed until they are reclaimed by Social Security System when it operates a Social Security deficit
"economic incidence"
who actually pays the tax
"statutory incidence"
who has legal obligation to collect or pay a tax