Social Insurance, An Economic Analysis

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, does effective accumula- tion for old age become possible. 1 What will be the effect on thrift of the different methods of providing for old age by social legislation? Thrift will be affected by either weakening of the motives to saving or lessening of the ability to save. The only motive to save that would be affected by social provision for old age is the desire to make independent provision for old age. The reduction of this desire can obviously have weight only to the extent that the desi...re itself is effective, only, that is, to the extent that provision for the years of dependence is actually made by the working class by thrift at the present time. Social legislation, on the other hand, would diminish the practical possibility of exercising thrift only to the extent that it reduced wages.
There are three principal ways in which governments have tried to solve the problem of destitution in old age. They have sought to encourage and stimulate thrift. France and Belgium have established old-age-pension institutions, which offer definite pensions in return for a given amount of deposits.


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