Alternative Methods of Price Indexing Social Security: Implications for Benefits and System Financing
This paper explains four methods of "price indexing" initial Social Security retirement benefits, and discusses the effect of each method on the fiscal sustainability of Social Security, benefit levels and replacement rates, redistribution, and sensitivity of system finances to demographic and economic shocks. Of these methods, PIA Factor Indexing would generate the largest cost savings while reducing benefit growth at approximately an equal rate for all income levels. Methods that index the AIME, the formula "bend points," or both, would reduce benefit growth at a slower rate and would have different effects on benefit distribution and system sustainability.
|Date of creation:||Jun 2005|
|Date of revision:|
|Publication status:||published as Biggs, Andrew G., Jeffrey R. Brown and Glenn Springstead. "Alternative Methods Of Price Indexing Social Security: Implications For Benefits And System Financing," National Tax Journal, 2005, v58(3,Sep), 483-504.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Gustman, Alan L. & Steinmeier, Thomas L., 2001.
"How effective is redistribution under the social security benefit formula?,"
Journal of Public Economics,
Elsevier, vol. 82(1), pages 1-28, October.
- Alan L. Gustman & Thomas L. Steinmeier, 2000. "How Effective is Redistribution Under the Social Security Benefit Formula?," Working Papers wp005, University of Michigan, Michigan Retirement Research Center.
- Alan L. Gustman & Thomas L. Steinmeier, 2000. "How Effective is Redistribution Under the Social Security Benefit Formula?," NBER Working Papers 7597, National Bureau of Economic Research, Inc.
- Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
- Jagadeesh Gokhale & Kent Smetters, 2005.
"Measuring Social Security's Financial Problems,"
NBER Working Papers
11060, National Bureau of Economic Research, Inc.
- Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:11406. 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: ()
If references are entirely missing, you can add them using this form.