Tuesday, March 19, 2013

Brannon: How Republicans Really View Social Security

Writing for Salon.com, Ike Brannon of the R Street Institute talks about what really would be needed to come to a deal on social security reform.

The answer: more than you might think. It’s well worth checking out.

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Sunday, March 17, 2013

New paper: "Mortality Differentials by Lifetime Earnings Decile: Implications for Evaluations of Proposed Social Security Law Changes"

"Mortality Differentials by Lifetime Earnings Decile: Implications for Evaluations of Proposed Social Security Law Changes"
Social Security Bulletin 73(1): 1-37, 2013

HILARY WALDRON, U.S. Social Security Administration
Email: hilary.waldron@ssa.gov

To evaluate the distributional effects of some proposed Social Security law changes, such as an increase in Social Security's early entitlement age, retirement policy analysts typically tabulate the number of workers who fall below a predetermined threshold of hardship. Analysts using this technique often implicitly assume that the insured population falls neatly into a low-earnings poor health group and a remaining good health group. If the hardship threshold assumption is correct, there should be no difference in mortality risk between lifetime earnings deciles above a hardship threshold. This study finds that the hardship threshold model is overwhelmingly rejected in US Social Security data, a result consistent with similar studies conducted in Canada, Germany, and England. The bottom 80-95 percent of the male lifetime earnings distribution exhibits an inverse correlation with regard to mortality risk (the higher the earnings, the lower the mortality risk) at ages 63-71.

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Friday, March 15, 2013

Tuesday, March 5, 2013

Upcoming NASI event: “What Do Americans Want for Social Security?”

Beyond the Sequester: What Do Americans Want for Social Security?

Register Now – Space is Limited

Tuesday, March 12, 2013 ~ 2:00-3:15pm

Capitol Visitors Center, Room SVC 212-10
(East Capitol Street & First Street, NE, Washington DC)

With lawmakers considering changes to Social Security such as adopting the chained CPI, it’s important to know what their constituents want — across political parties, generations, and income levels. Join us for a discussion of the findings from an innovative new national survey.

Social Security faces a long-term funding challenge. How do Americans want to deal with it? This survey used trade-off analysis, a technique widely used in market research, to explore how Americans would prefer to modify and pay for Social Security for the long run. If voters could choose their own policy package, what would it look like?

Survey participants chose among policy options that would cut benefits, increase benefits, or raise revenues to put the program on solid footing for future generations. Speakers will present findings from NASI’s new report — Strengthening Social Security: What Do Americans Want? — and will discuss the implications for policymakers.

Featured speakers:

  • Lisa Mensah, The Aspen Institute
  • James Roosevelt, Jr., Tufts Health Plan
  • Jasmine V. Tucker, National Academy of Social Insurance
  • Mathew Greenwald, Mathew Greenwald & Associates
  • Virginia Reno, National Academy of Social Insurance        

This forum builds on “People vs. Pundits: A Disconnect in Public Opinion on Social Security,” a roundtable event held on February 1, 2013, at NASI’s annual conference.

Resister Now.

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Alter: Democrats Need to Get Smart on Entitlements

Bloomberg columnist Jonathan Alter argues that his fellow Democrats need to think more seriously about entitlement reform. Alter disagrees with the Republican approach to fixing entitlements, but chides his own side for not thinking about reform at all.

“Anyone reaching retirement age in the next 20 years (including me) will take more than three times as much out of Medicare as he or she contributed in taxes. By 2030, the U.S. will have twice as many retirees as in 1995, and Social Security and Medicare alone will consume half of the federal budget, with the other half going almost entirely to defense and interest on the national debt. It’s unsustainable.”

“If Democrats don’t want to talk about these programs, they can say goodbye to every other pet program. We can preserve Medicare in amber only at the expense of investments in prekindergarten programs or cancer research.”

While I’ve got some factual quibbles with Alter’s piece, it’s nevertheless a good read.

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Monday, March 4, 2013

New paper from the NBER

Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation

by Edgar Vogel, Alexander Ludwig, Axel Boersch-Supan -


Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase capital intensity with falling rates of return to capital and increasing wages. This decreases welfare for middle aged agents with assets accumulated for retirement.

This paper addresses three important adjustments channels to dampen these detrimental effects of ageing: investing abroad, endogenous human capital formation and increasing the retirement age. Although non of these suggestions is new in itself, we examine their effects jointly in one coherent model.

Our quantitative finding is that openness has a relatively mild effect. In contrast, endogenous human capital formation in combination with an increase in the retirement age has strong effects. Under these adjustments maximum welfare losses of demographic change for households alive in 2010 are reduced by about 3 percentage points.


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