Lifespan Inequality and Social Security Reform

Abstract: What does lifespan inequality mean for Social Security reform? Using a life-cycle model in which the rich tend to outlive the poor, the researchers analyze how various reforms affect the trade-off between distributing lifetime Social Security benefits more equally and encouraging society's most productive members to work longer. They find that social welfare is maximized when beneļ¬ts are independent of lifetime earnings, the payroll tax cap remains near its current level, and benefits are made less dependent on the age at which they are initially claimed.

Keywords: Economic Growth and Fiscal Policy;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2020-11

Volume: 20

Issue: 12

Pages: 4 pgs.