The Genesis and Evolution of Social Security
We examine the creation of Social Security during the Great Depression, and how it has evolved since, asking in particular to what extent the program as it exists today is the same as that created in 1935 and 1939. We find that there has been surprising continuity. Much of the program's growth was built in from its inception. The replacement rate and the ratio of benefits to payrolls are today roughly at the levels designed into the original legislation. Payroll tax rates today are higher than had been planned, in part because of the failure to accumulate a trust fund during the program's early years. The change in the ratio of contributors to beneficiaries which has taken place over the last 60 years was fully anticipated. The most dramatic changes in Social Security's functioning have come not from legislation, but from changes in the environment in which the program operates. Before the Depression, retirement was unlikely and often involuntary. Higher life expectancy, lower labor force participation, and better health have undermined Social Security's original purpose, which was as a form of insurance. We also find that the Depression itself had surprisingly little influence on the design chosen for Social Security.
|Date of creation:||Mar 1997|
|Date of revision:|
|Publication status:||published as Miron, Jeffrey A. and David N. Weil. "The Genesis and Evolution of Social Security". The Defining Moment: The Great Depression and the American Economy in the Twentieth Century. Edited by Michael D. Bordo, Claudia Goldin, and Eugene N. White, Chicago: The University of Chicago Press, 1998, pp. 297-322.|
|Contact details of provider:|| Postal: |
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.:
- Weaver, Carolyn L., 1983. "On the lack of a political market for compulsory old-age insurance prior to the great depression: Insights from economic theories of government," Explorations in Economic History, Elsevier, vol. 20(3), pages 294-328, July.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5949. 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.