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Proposals to Restructure Social Security

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  • Peter A. Diamond

Abstract

This paper discusses five proposed changes in Social Security: indexing the normal retirement age to life expectancy (as Sweden is doing); investing part of the trust funds in private securities; partial privatization (as has been proposed by Senators Kerrey and Simpson, Sweden is doing and Mexico has done); replacing Social Security by individually mandated savings (as was done in Chile in 1981); and mandating employer provided retirement savings (as recently legislated in Australia and is effectively the case in some European countries.) The economics of Social Security and the politics of restoring (and preserving) actuarial balance are discussed.

Suggested Citation

  • Peter A. Diamond, 1996. "Proposals to Restructure Social Security," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 67-88, Summer.
    • Handle: RePEc:aea:jecper:v:10:y:1996:i:3:p:67-88
    Note: DOI: 10.1257/jep.10.3.67
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.3.67
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    References listed on IDEAS

    as
    1. Vittas, Dimitri & Iglesias, Augusto, 1992. "The rationale and performance of personal pension plans in Chile," Policy Research Working Paper Series 867, The World Bank.
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    4. Annika E. Sunden & Olivia S. Mitchell, "undated". "An Examination of Social Security Administration Costs in the United States," Pension Research Council Working Papers 94-7, Wharton School Pension Research Council, University of Pennsylvania.
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    6. Benjamin M. Friedman & Mark J. Warshawsky, 1990. "The Cost of Annuities: Implications for Saving Behavior and Bequests," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(1), pages 135-154.
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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