Distributional Implications of Social Security Reform for the Elderly: The Impact of Revising COLAs, the Normal Retirement Age, and the Taxation of Benefits
AbstractSeveral reform plans have been proposed to reduce the financial strain on Social Security. Many proposals under consideration, however, would exacerbate the inequality of income among the elderly. Using data from the Current Population Survey, this paper finds that reducing cost-of-living escalators, even when the reforms are designed to protect low-income beneficiaries, would generally worsen inequality over time and increase the number of elders with income below the poverty level. Raising the retirement age would generate similar results. However, increasing taxes on retirement benefits would improve the financial outlook for Social Security without imposing additional hardships on the poorest elderly.
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Bibliographic InfoArticle provided by National Tax Association in its journal National Tax Journal.
Volume (Year): 52 (1999)
Issue (Month): n. 3 (September)
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- Julia Lynn Coronado & Don Fullerton & Thomas Glass, 1999.
"Distributional Impacts of Proposed Changes to the Social Security System,"
in: Tax Policy and the Economy, volume 13, pages 149-186
National Bureau of Economic Research, Inc.
- Julia Lynn Coronado & Don Fullerton & Thomas Glass, 1999. "Distributional Impacts of Proposed Changes to the Social Security System," NBER Working Papers 6989, National Bureau of Economic Research, Inc.
- Panis, C.W.A. & Lillard, L.A., 1996. "Socioeconomic Differentials in the Returns to Social Security," Papers 96-05, RAND - Labor and Population Program.
- Steven Caldwell & Melissa Favreault & Alla Gantman & Jagadeesh Gokhale & Thomas Johnson, 1998.
"Social Security's Treatment of Postwar Americans,"
NBER Working Papers
6603, National Bureau of Economic Research, Inc.
- Wade Pfau, 2004. "The Impact of a Social Security Cost-of-Living Adjustment Reduction on the Income Distribution of the Elderly in the United States," Econometric Society 2004 Far Eastern Meetings 694, Econometric Society.
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