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By Ping Wang St John’s University ARIA 2006, D.C.

Brief Discussion on J Seligman’s Health, Wealth, and Workforce Exit: Disability Insurance & Individual Accounts. By Ping Wang St John’s University ARIA 2006, D.C. What Does the Paper Address.

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By Ping Wang St John’s University ARIA 2006, D.C.

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  1. Brief Discussion onJ Seligman’sHealth, Wealth, and Workforce Exit: Disability Insurance & Individual Accounts By Ping Wang St John’s University ARIA 2006, D.C.

  2. What Does the Paper Address Disability insurance (DI) in the context of the proposed individual accounts (IA) of social security ARIA'06 Discussion

  3. Comparison of Two Systems • Benefit under Individual Accounts • Total transition to DC type • All equity investment • Benefit under current Social Security system ARIA'06 Discussion

  4. Alternate Designs • The individual renders IA to the DI trust and the trust pays benefits to disabled individuals • The DI trust contributes to IA of the disabled and the disabled receives benefits from own IA ARIA'06 Discussion

  5. The Paper Sheds light on • Whether the IA idea is to the advantage or disadvantage of DI, • how individuals may response to alternate designs integrating IA and DI, and hence • how IA proposal may affect the demand for DI. ARIA'06 Discussion

  6. Questions Related • The author compares account balances available upon retirement. However the amount of monthly benefit may also concern retirees. With current SS it is guaranteed. Is it guaranteed under the proposed IA? • Does the investment strategy of the disabled group differ from that of general population, hence their accounts perform differently? ARIA'06 Discussion

  7. Suggestions • In the text give examples to help readers understand numeric entries in the tables • Table 1 suggests IEA outperforms SSA most time. The comparison will be better apprehended if info is available on when the situation happens (e.g., when stock market is sluggish?) ARIA'06 Discussion

  8. Minors • Where is Table 1b? • Some abbreviations are not clear in meaning, for instance SSI on page 16 andδ(partial derivative?) in equation 2, 3 • In eq 2 and 6, a right bracket ) is missing ARIA'06 Discussion

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