Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Impact of a Social Security Cost-of-Living Adjustment Reduction on the Income Distribution of the Elderly in the United States

Contents:

Author Info

  • Wade Pfau

Abstract

In previous research, I find that a reduction of the cost-of-living adjustment has performed quite well in comparisons among different Social Security reform proposals. While a COLA reduction contains many positive features, there is some concern that it would push the most vulnerable members of the population into further poverty. In this paper, I use the Current Population Survey to simulate the effects of a COLA reduction on the incomes of a sample of aged units. I also consider modified COLA reduction plans that would apply only to certain ranges of ages. I find that COLA reductions can create significant effects on the incomes of the population, as once the COLA reduction is fully in effect, the incomes of some of the poorest elderly could be as much as 10% lower than at present. Nonetheless, the news is not entirely discouraging, as the savings of the COLA reduction to the Trust Fund are many times greater than the increased poverty that the COLA reduction would create. This leaves fertile ground to fashion a COLA reduction plan that includes income guarantees for the poorest members of the population, while also relieving a great deal of the future funding problems expected for the Trust Fund.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://repec.org/esFEAM04/up.17920.1080709910.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 694.

as in new window
Length:
Date of creation: 11 Aug 2004
Date of revision:
Handle: RePEc:ecm:feam04:694

Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Email:
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC

Related research

Keywords: Social Security Reform; Income Distribution;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Gerontocracy, Retirement, and Social Security," NBER Working Papers 7117, National Bureau of Economic Research, Inc.
  2. Angus Deaton & Christina Paxson, 1995. "Measuring Poverty Among the Elderly," NBER Working Papers 5296, National Bureau of Economic Research, Inc.
  3. Johnson, Richard W., 1999. "Distributional Implications of Social Security Reform for the Elderly: The Impact of Revising COLAs, the Normal Retirement Age, and the Taxation of Benefits," National Tax Journal, National Tax Association, vol. 52(n. 3), pages 505-30, September.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ecm:feam04:694. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.