The Distributional Effects Of An Investment Based Social Security System
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The Distributional Effects Of An Investment Based Social Security System
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Author : Martin S. Feldstein
language : en
Publisher:
Release Date : 2000
The Distributional Effects Of An Investment Based Social Security System written by Martin S. Feldstein and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Income distribution categories.
In this paper we study the distributional impact of a change from the existing pay-as-you-go Social Security system to one that combines both pay-as-you-go and investment-based elements. Critics of investment-based plans have been concerned that such plans might reduce the retirement income of low-paid workers or of surviving spouses relative to what they would get from Social Security, and might therefore increase the extent of poverty among the aged. Our analysis in this paper shows that this is generally not the case, even in plans that make no special effort to maintain or increase redistribution. Our principal finding is that virtually all of the demographic groups that we examine would receive higher average benefits under a mixed system with an investment-based component than the benefits that they would receive under current Social Security rules. There would also be a smaller share of individuals with benefits below the poverty line even though the total cost of funding the mixed system -- a three percent saving contribution rather than a six percent rise in the tax rate -- is substantially lower than that of funding the pay-as-you-go system. Our individual-level data permit us to go beyond comparing group means to analyze the full distribution of the benefits that individuals would receive under the two different systems. These comparisons show that the overwhelming majority of individuals would have higher benefits with the investment-based system than with the pure pay-as-you-go system. The relatively small number of individuals who would receive less from the investment-based system is further reduced when the effects of the Supplementary Security Income program is taken into account. These basic conclusions remain true even if the future rate of return in the investment-based component of the mixed system is substantially less than past experience implies.
The Distributional Aspects Of Social Security And Social Security Reform
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Author : Martin Feldstein
language : en
Publisher: University of Chicago Press
Release Date : 2007-11-01
The Distributional Aspects Of Social Security And Social Security Reform written by Martin Feldstein and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-11-01 with Political Science categories.
Social security is the largest and perhaps the most popular program run by the federal government. Given the projected increase in both individual life expectancy and sheer number of retirees, however, the current system faces an eventual overload. Alternative proposals have emerged, ranging from reductions in future benefits to a rise in taxrevenue to various forms of investment-based personal retirement accounts. As this volume suggests, the distributional consequences of these proposals are substantially different and may disproportionately affect those groups who depend on social security to avoid poverty in old age. Together, these studies persuasively show that appropriately designed investment-based social security reforms can effectively reduce the long-term burden of an aging society on future taxpayers, increase the expected future income of retirees, and mitigate poverty rates among the elderly.
Social Security
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Author : Martin S. Feldstein
language : en
Publisher:
Release Date : 2001
Social Security written by Martin S. Feldstein and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Social security categories.
This paper, a forthcoming chapter in the Handbook of Public Economics, reviews the theoretical and empirical issues dealing with Social Security pensions. The first part of the paper discusses pure pay-as-you-go plans. It considers the effects of introducing such a plan on the present value of consumption, the optimal level of benefits in such plans, and the emprical research on the effects of pay-as-you-go pension systems on labor supply and saving. The second part of the paper discusses the transition to investment-based systems, analyzing the effect on the present value of consumption of such a transition and considering such issues as the distributional effects and risk associated with such systems.
On The Distributional Effects Of Social Security Reform
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Author : Mark Huggett
language : en
Publisher: London : Department of Economics, University of Western Ontario
Release Date : 1998
On The Distributional Effects Of Social Security Reform written by Mark Huggett and has been published by London : Department of Economics, University of Western Ontario this book supported file pdf, txt, epub, kindle and other format this book has been release on 1998 with Social security categories.
Retirement Policy In An Income Distributional Framework
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Author : Marcy Avrin
language : en
Publisher:
Release Date : 1981
Retirement Policy In An Income Distributional Framework written by Marcy Avrin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1981 with Income distribution categories.
The Distributional Impact Of Social Security
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Author : Michael D. Hurd
language : en
Publisher:
Release Date : 1983
The Distributional Impact Of Social Security written by Michael D. Hurd and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1983 with Age groups categories.
In the first part of the paper we report estimated transfers in the Social Security system for the Retirement History Survey sample.We define transfers to be the difference between the expected presentvalue of benefits less the present value of taxes paid in, where the latter is adjusted for the probability of living to reach retirement age.Unlike previous researchers we, therefore, account for the taxes paid by people who died before retirement, and it turns out this adjustment is important for some groups. The Retirement History Survey cohort will receive large transfers: roughly benefits will be about four times taxes,and the real internal rate of return will be about eight percent. We study how transfers vary by a comprehensive measure of wealth. People in the highest wealth quartile have the largest absolute transfers, and their internal rate of return is as high as that of any wealth quartile.In the second part of the paper we study transfers forsix synthetic cohorts, the heads of which are age 65 in the ten-year intervals 1970 through 2020. Within each cohort 12 families are defined according to earnings levels.We find that transfers are positive and large for the 1970 cohort, and that they decline steadily until they are negative for most groups in the 2020 cohort. Although high earners initially have the largest transfers in the 1970 cohort, they have the largest negative transfers in the 2020 cohort.
Social Security Policy In A Changing Environment
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Author : Jeffrey R. Brown
language : en
Publisher: University of Chicago Press
Release Date : 2009-12-15
Social Security Policy In A Changing Environment written by Jeffrey R. Brown and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-12-15 with Business & Economics categories.
Social Security Policy in a Changing Environment analyzes the changing economic and demographic environment in which social insurance programs that benefit elderly households will operate. It also explores how these ongoing trends will affect future beneficiaries, under both the current social security program and potential reform options. In this volume, an esteemed group of economists probes the challenge posed to Social Security by an aging population. The researchers examine trends in private sector retirement saving and health care costs, as well as the uncertain nature of future demographic, economic, and social trends—including marriage and divorce rates and female participation in the labor force. Recognizing the ambiguity of the environment in which the Social Security system must operate and evolve, this landmark book explores factors that policymakers must consider in designing policies that are resilient enough to survive in an economically and demographically uncertain society.
Social Security
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Author :
language : en
Publisher:
Release Date : 2004
Social Security written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Income distribution categories.
Risk Aspects Of Investment Based Social Security Reform
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Author : John Y. Campbell
language : en
Publisher: University of Chicago Press
Release Date : 2009-02-15
Risk Aspects Of Investment Based Social Security Reform written by John Y. Campbell and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-02-15 with Political Science categories.
Our current social security system operates on a pay-as-you-go basis; benefits are paid almost entirely out of current revenues. As the ratio of retirees to taxpayers increases, concern about the high costs of providing benefits in a pay-as-you-go system has led economists to explore other options. One involves "prefunding," in which a person's withholdings are invested in financial instruments, such as stocks and bonds, the eventual returns from which would fund his or her retirement. The risks such a system would introduce—such as the volatility in the market prices of investment assets—are the focus of this offering from the NBER. Exploring the issues involved in measuring risk and developing models to reflect the risks of various investment-based systems, economists evaluate the magnitude of the risks that both retirees and taxpayers would assume. The insights that emerge show that the risk is actually moderate relative to the improved return, as well as being balanced by the ability of an investment-based system to adapt to differences in individual preferences and conditions.
Social Security Pension Reform In Europe
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Author : Martin Feldstein
language : en
Publisher: University of Chicago Press
Release Date : 2009-02-15
Social Security Pension Reform In Europe written by Martin Feldstein and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009-02-15 with Political Science categories.
Social Security in the United States and in Europe is at a critical juncture. Through the essays assembled in Social Security Pension Reform in Europe, Martin Feldstein and Horst Siebert, along with a number of distinguished contributors, discuss the challenges facing Social Security reform in the aging societies of Europe. A remarkable range of European nations—Germany, France, Finland, the Netherlands, Poland, Romania, Italy, Sweden, the United Kingdom, and Hungary—have implemented or are about to implement mixed Social Security systems that combine a traditional defined benefit of the pay-as-you-go system with an individual retirement account defined contribution of a capital-funded system. The essays here highlight the problems that the European pension reform process faces and how it differs from that of the United States. This timely volume will significantly enrich the debate on pension reform worldwide.