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Winners and Losers Under Various Approaches to Slowing Social Security Benefit Growth

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  • Harris, Amy Rehder
  • Simpson, Michael

Abstract

Under current projections, payroll tax revenues and accumulated interest in the Social Security trust fund will be insufficient to pay scheduled benefits when workers entering the labor force today reach retirement age. Given this outlook, three policy options for slowing future benefit growth are considered. Each achieves sustainable solvency according to the Flat Fund Ratio criterion. Winners and losers across birth cohorts and income groups are identified under reforms including immediate and permanent benefit cuts, linking benefits to life expectancy and limiting initial benefit growth to price rather than wage inflation. Reforms are considered with and without a minimum benefit.

Suggested Citation

  • Harris, Amy Rehder & Simpson, Michael, 2005. "Winners and Losers Under Various Approaches to Slowing Social Security Benefit Growth," National Tax Journal, National Tax Association;National Tax Journal, vol. 58(3), pages 523-543, September.
    • Handle: RePEc:ntj:journl:v:58:y:2005:i:3:p:523-43
    DOI: 10.17310/ntj.2005.3.14
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    References listed on IDEAS

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    1. Feldstein, Martin & Liebman, Jeffrey B. (ed.), 2002. "The Distributional Aspects of Social Security and Social Security Reform," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226241067.
    2. Martin Feldstein & Jeffrey B. Liebman, 2002. "The Distributional Aspects of Social Security and Social Security Reform," NBER Books, National Bureau of Economic Research, Inc, number feld02-1.
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    Cited by:

    1. John Sabelhaus & Lina Walker, 2009. "Econometric flexibility in microsimulation: an age-centred regression approach," International Journal of Microsimulation, International Microsimulation Association, vol. 2(2), pages 1-14.
    2. Nitz, Lawrence H., 2010. "Who Loses: An examination of losses in housing net worth, non-housing assets, and total savings from 2007 to 2008 among American families," MPRA Paper 24897, University Library of Munich, Germany.
    3. John Sabelhaus & Julie Topoleski, 2006. "Uncertain Policy for an Uncertain World: The Case of Social Security: Working Paper 2006-05," Working Papers 17664, Congressional Budget Office.
    4. Lassila, Jukka & Valkonen, Tarmo, 2007. "Longevity Adjustment of Pension Benefits," Discussion Papers 1073, The Research Institute of the Finnish Economy.

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