Uncertain Policy for an Uncertain World: The Case of Social Security: Working Paper 2006-05
AbstractAnalysis and discussion of Social Security policy are usually based on expected fiscal and societal outcomes. However, future demographic and economic trends are uncertain, and thus ultimate outcomes for aggregate system financial flows and the distribution of taxes and benefits across generations are uncertain. This paper analyzes a state-dependent approach to policy in which future Social Security benefit formulas are tied to realized economic and demographic outcomes over time. The results, based on a microsimulation model with stochastic capabilities, show the extent to which it is possible to systematically address uncertainty about system finances and distributional outcomes.
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Bibliographic InfoPaper provided by Congressional Budget Office in its series Working Papers with number 17664.
Date of creation: 01 Mar 2006
Date of revision:
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