Friday, December 28, 2018

New papers from the NBER

Social Security Incentives in Belgium: An Analysis of Four Decades of Change
Anne-Lore Fraikin, Alain Jousten, and Mathieu Lefebvre #25375
The paper traces labor market reforms over the last four decades. It provides estimates of retirement incentives for a selected set of typical worker profiles across time and socioeconomic groups and links these series to the labor market performance in Belgium. The results show that the numerous retirement and social security program reforms have had a marked impact on incentives at the micro level. At the aggregate level, results are less clear-cut given the extreme diversity of programs and features in the Belgian institutional context.

Social Security Reforms and the Changing Retirement Behavior in Sweden
MÃ¥rten Palme and Lisa Laun #25394
We show how the economic incentives to remain in the labor force induced by Sweden’s public old-age pension system and disability insurance program have changed between 1980 and 2015. Based on earnings histories for different hypothetical individuals corresponding to groups by gender and educational attainments we calculate the following measures: the replacement rate (RR), the social security wealth (SSW), the accrual in the social security wealth from working one additional year as well as the implicit tax rate on working longer (ITAX). We then investigate to what extent the observed changes in these measures concur with changes in employment rates among older workers.

Read more!

Wednesday, December 12, 2018

Social Security Bulletin, Vol. 78, No. 4

Social Security Totalization Agreements

by Brent W. Jackson and Scott Cash

Since the 1970s, U.S. negotiators have concluded bilateral agreements with 28 important trading partners to coordinate social security coverage and benefit provisions for individuals who live and work in more than one country in their working lives. Known as “totalization agreements,” they are similar in function and structure to treaties and are legally classified as congressional-executive agreements concluded pursuant to statute. The agreements have three main purposes: to eliminate double taxation on earnings, to provide benefit protections for workers who have divided their careers between the United States and another country, and to permit unrestricted payment of benefits to residents of the two countries. This article briefly describes totalization agreements, relates their history, and considers proposals to modernize and enhance them.

When Every Dollar Counts: Comparing Reported Earnings of Social Security Disability Program Beneficiaries in Survey and Administrative Records

by David C. Wittenburg, Jeffrey Hemmeter, Holly Matulewicz, Lindsay Glassman, and Lisa Schwartz

This article examines differences between survey- and administrative data–based estimates of employment and earnings for a sample of Social Security Administration (SSA) disability program beneficiaries. The analysis uses linked records from SSA's National Beneficiary Survey and administrative data from the agency's Master Earnings File. The authors find that estimated employment rates and earnings levels based on administrative data are higher than those based on survey data for beneficiaries overall and by sociodemographic subgroup. In proportional terms, the differences between survey and administrative data tend to be greater among subgroups with survey-reported employment rates that are lower than that of beneficiaries overall.

Social Security Administration Payments to State Vocational Rehabilitation Agencies for Disability Program Beneficiaries Who Work: Evidence from Linked Administrative Data

by Jody Schimmel Hyde and Paul O'Leary

This article's authors use linked administrative data from the Social Security Administration (SSA) and the Department of Education's Rehabilitation Services Administration to evaluate SSA's investment in services provided by the federal-state Vocational Rehabilitation (VR) program. A unique data resource permits a comparison of the value of SSA payments to state VRagencies for services provided to disability program beneficiaries who find and maintain a substantial level of work with the value of the cash benefits those beneficiaries forgo because of work. The authors find that the value of cash benefits forgone by beneficiaries after applying for VR services is substantially greater than the value of SSA payments to state VR agencies for those services, although the portion of the difference that is attributable to VR services cannot be determined.

Read more!

New papers from the NBER

The Effect of Economic Conditions on the Disability Insurance Program: Evidence from the Great Recession
Nicole Maestas, Kathleen J. Mullen, and Alexander Strand #25338
We examine the effect of cyclical job displacement during the Great Recession on the Social Security Disability Insurance (SSDI) program. Exploiting variation in the severity and timing of the recession across states, we estimate the effect of unemployment on SSDI applications and awards. We find the Great Recession induced nearly one million SSDI applications that otherwise would not have been filed, of which 41.8 percent were awarded benefits, resulting in over 400,000 new beneficiaries who made up 8.9 percent of all SSDI entrants between 2008-2012. More than one-half of the recession-induced awards were made on appeal. The induced applicants had less severe impairments than the average applicant. Only 9 percent had the most severe, automatically-qualifying impairments, 33 percent had functional impairments and no transferable skills, and the rest were denied for having insufficiently severe impairments and/or transferable skills. Our estimates imply the Great Recession in! creased claims processing costs by $2.960 billion during 2008-2012, and SSDI benefit obligations by $55.730 billion in present value, or $97.365 billion including both SSDI and Medicare benefits.

Annuity Pricing in Public Pension Plans: Importance of Interest Rates
Nino Abashidze, Robert L. Clark, Beth Ritter, and David Vanderweide #25343
There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of these plans and how the monthly benefits for these distribution options are priced. The analysis shows that interest rates used to price annuities vary considerably across the plans. As a result, retirees with the same monthly benefit if a single life benefit is chosen will have substantially different monthly benefits if they select the joint and survivor annuity offered by their retirement plan.

Read more!

Tuesday, December 11, 2018

Agenda for December 14th Technical Panel Meeting

2019 Technical Panel on Assumptions and Methods
Meeting Agenda

Friday, December 14th, 2018

The meeting will be held in the offices of the Social Security Advisory Board:
400 Virginia Avenue SW, Suite 625, Washington DC 20024

11:00am-12:30pm Mortality rate assumptions and methods
Gerard Anderson, Professor of Health Policy and Management and
Professor of International Health, Johns Hopkins University Bloomberg
School Public Health
David Cutler, Harvard College Professor, Otto Eckstein Professor of
Applied Economics, Harvard University
Greig Woodring, retired CEO, Reinsurance Group of America
Office of the Chief Actuary, Social Security Administration

12:30pm-1:00pm Lunch break

1:00pm-2:00pm Mortality rate assumptions and methods (continued)

2:00pm-5:00pm Disability assumptions and methods
Jeffrey Liebman, Malcolm Wiener Professor of Public Policy Kennedy
School of Government, Harvard University
Jeffrey L. Schuh, Vice President and Actuary, US Group Reinsurance,
Reinsurance Group of America
Richard Leavitt, Senior Vice President Actuarial, Smith Group
Office of the Chief Actuary, Social Security Administration

Attendees who require a reasonable accommodation,
please call 202-475-7700 at least three days before the meeting date.

For more information on the 2019 Technical Panel, click here.

Read more!