@techreport{NBERw7739,
 title = "The Effects of Investing Social Security Funds in the Stock Market When Fixed Costs Prevent Some Households from Holding Stocks",
 author = "Andrew B. Abel",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "7739",
 year = "2000",
 month = "June",
 URL = "http://www.nber.org/papers/w7739",
 abstract = {With fixed costs of participating in the stock market, consumers with high income will participate in the stock market, but consumers with lower income will not participate.  If a fully-funded defined-contribution social security system tries to exploit the equity premium by selling a dollar of bonds per capita and buying a dollar of equity per capita, consumers who save but do not participate in the stock market will increase their consumption, thereby reducing saving and capital accumulation. Calibration of a general equilibrium model indicates that this policy could reduce the aggregate capital stock substantially, by about 50 cents per capita.},
}