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 beneﬁts 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;
File format is application/pdf
Provider: Federal Reserve Bank of Richmond
Part of Series: Richmond Fed Economic Brief
Publication Date: 2020-11
Pages: 4 pgs.