Essays on Individual Savings Accounts in the Presence of Migration
von Christian Bruno Stephan MetznerSocial insurance via individual savings accounts (ISA) strives to provide the same level of protection as a tax-financed benefit system, however with less companying downsides. The idea of personal accounts is relatively simple mechanism which results multifaceted consequences and advantages including a large variety of opportunities.
The general mechanism of the ISA system works as follows: Each individual holds a personal account which collects all contributions paid by this individual. The mandatory contribution rate replaces a part of the taxpayer’s annual tax bill or of the current social ecurity contributions. It is calculated as a share of the income. All benefits received by the individual in her life are debited from this account. This way, self-insurance is introduced to finance at least parts of the benefits by ISA.
The general mechanism of the ISA system works as follows: Each individual holds a personal account which collects all contributions paid by this individual. The mandatory contribution rate replaces a part of the taxpayer’s annual tax bill or of the current social ecurity contributions. It is calculated as a share of the income. All benefits received by the individual in her life are debited from this account. This way, self-insurance is introduced to finance at least parts of the benefits by ISA.