scholarly journals Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Changes, 1952-1991

2014 ◽  
Author(s):  
Christina Romer ◽  
David Romer
Keyword(s):  
Social Security ◽  
Social Security Benefit ◽  
Transfer Payments

scholarly journals Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Increases, 1952–1991

2016 ◽  
Vol 8 (4) ◽  
pp. 1-42 ◽  
Author(s):  
Christina D. Romer ◽  
David H. Romer
Keyword(s):  
Monetary Policy ◽  
Social Security ◽  
Industrial Production ◽  
Positive Response ◽  
Social Security Benefit ◽  
Transfer Payments ◽  
Macroeconomic Effects ◽  
Tax Changes

This paper uses Social Security benefit increases from 1952 to 1991 to investigate the macroeconomic effects of changes in transfers. It finds a large, immediate, and significant positive response of consumption to permanent benefit increases. The response declines after about five months, and does not appear to spread to industrial production or employment. The effects of transfers are faster, but much less persistent and much smaller overall, than those of tax changes. Finally, monetary policy responds strongly to benefit increases but not to tax changes. This may account for the failure of the effects of transfers to persist or spread. (JEL E21, E62, E63, H31, H55)

Social Security Benefit Uncertainty under Individual Accounts

2005 ◽  
Vol 23 (1) ◽  
pp. 1-16 ◽  
Author(s):  
Amy Rehder Harris ◽  
John Sabelhaus ◽  
Michael Simpson
Keyword(s):  
Social Security ◽  
Social Security Benefit ◽  
Individual Accounts

scholarly journals IS THE SOCIAL SECURITY CRISIS REALLY AS BAD AS WE THINK?

2015 ◽  
Vol 20 (3) ◽  
pp. 737-776 ◽  
Author(s):  
Shantanu Bagchi
Keyword(s):  
Social Security ◽  
General Equilibrium ◽  
Incomplete Markets ◽  
Equilibrium Model ◽  
Social Security Benefit ◽  
Social Security Administration ◽  
Tax Base ◽  
Household Level ◽  
The Social ◽  
Natural Expansion

Because they ignore the household-level and macroeconomic adjustments associated with longevity improvements, the actuarial projections of the Social Security Administration overestimate the Social Security crisis. Using a general-equilibrium model with heterogeneous households and incomplete markets, I show that with these adjustments accounted for, a significantly smaller decline in benefits is needed to balance the Social Security budget. Households respond by delaying retirement and Social Security benefit collection, by working more hours, and by also saving more. In general equilibrium, these effects lead to a natural expansion of Social Security's tax base and generate significant delayed retirement credits, which the actuarial estimates completely overlook.

Redistribution under the Social Security benefit formula at the individual and household levels, 1992 and 2004

2012 ◽  
Vol 12 (1) ◽  
pp. 1-27 ◽  
Author(s):  
ALAN L. GUSTMAN ◽  
THOMAS L. STEINMEIER ◽  
NAHID TABATABAI
Keyword(s):  
Social Security ◽  
Labor Force Participation ◽  
Social Security Benefit ◽  
Household Level ◽  
Individual Level ◽  
The Social ◽  
High Earning ◽  
Using Data ◽  
The Individual ◽  
Over Time

AbstractStudies using data from the early 1990s suggested that while the progressive Social Security benefit formula succeeded in redistributing benefits from individuals with high earnings to individuals with low earnings, it was much less successful in redistributing benefits from households with high earnings to households with low earnings. Wives often earned much less than their husbands. As a result, much of the redistribution at the individual level was effectively from high earning husbands to their own lower earning wives. In addition, spouse and survivor benefits accrue disproportionately to women from high income households. Both factors mitigate redistribution at the household level. It has been argued that with the increase in the labor force participation and earnings of women, Social Security now should do a better job of redistributing benefits at the household level. To be sure, when we compare outcomes for a cohort with a household member age 51 to 56 in 1992 with those from a cohort born twelve years later, redistribution at the household level has increased over time. Nevertheless, as of 2004 there still is substantially less redistribution of benefits from high to low earning households than from high to low earning individuals.

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