Social Security, Induced Retirement, and Aggregate Capital Accumulation:A Correction and Updating
In a 1974 paper in the Journal of Political Economy I discussed the theoretical ambiguity of the effect of social security on private saving and presented statistical evidence that social security does on balance depress saving. Recently, an error was detected in the computer program that was used to construct the "social security wealth" variable. I have now corrected that error and re estimated the original consumer expenditure equation. I have also updated the analysis by including the five years of additional data that have become available since the original study was completed. The new estimates, presented in the current note, continue to indicate that social security substantially depresses private saving. The point estimates of this effect are somewhat lower than before but nevertheless simply that social security depresses saving by about fifty percent of its current value. The estimated reduction in saving is more than two-thirds of the concurrent "contributions" of employees and employers to the social security retirement and survivors fund.
|Date of creation:||Nov 1980|
|Date of revision:|
|Publication status:||published as Feldstein, Martin. "Social Security and Private Saving: Reply." Journal of Political Economy, Vol. 90, No. 3 (June, 1982), pp.630-642.|
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- Martin Feldstein, 1979.
"International Differences in Social Security and Saving,"
NBER Working Papers
0355, National Bureau of Economic Research, Inc.
- Feldstein, Martin, 1980. "International differences in social security and saving," Journal of Public Economics, Elsevier, vol. 14(2), pages 225-244, October.
- Martin Feldstein, 1980. "International differences in social security and saving," NBER Chapters, in: Econometric Studies in Public Finance, pages 225-244 National Bureau of Economic Research, Inc.
- Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
- Martin Feldstein & Jeffrey B. Liebman, 2001.
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
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