GRIPS 政策研究センター Policy Research Center


Feb 1, 2008 Report No:07-11

Assessing the Applicability of Hypothetical Workers for Defined-Contribution Pensions

  • Pfau WadeGRIPS
Field Economics
Language English

An understanding of the financial and distributional consequences of Social Security reform
requires knowledge about the actual life circumstances of participants, including the level and
pattern of their lifetime earnings and when they retire. Some analyses of Social Security reform
make simplifying assumptions about these characteristics by using “hypothetical workers” with
set career paths. We seek to develop greater understanding about actual lifetime earnings
patterns to compare with hypothetical workers and find discrepancies which lead typical
hypothetical workers to produce a more favorable impression for defined-contribution pension
reforms. We suggest modifications to make a more suitable hypothetical worker.

Keywords Social Security, Hypothetical Workers, Defined-Contribution Pensions
attachment 07-11.pdf