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2/4/2004: Social Security and Unsecured Debt (National Bureau of Economic Research [NBER])
Excerpt: Most young households simultaneously hold both unsecured debt on which they pay an average of 10 percent interest and social security wealth on which they earn less than 2 percent.... We show that both allowing households to use social security wealth to pay off debt and exempting young households from social security contributions (but in both cases requiring higher contributions later later in life) leads to increases in welfare for both types of households ...
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