Title

Differential Mortality and the Progressivity of Social Security

Award Year

2015

Grant Type

Early Career Research Award

Description

Social Security benefits in the U.S. are linked to past work-life income through a progressive benefit-earnings formula. In this paper, I examine if this arrangement is optimal in a framework where income and life expectancy are positively correlated. To do this, I construct a general-equilibrium macroeconomic model with optimizing households, firms, and a government, and also with markets for the different goods and services. I calibrate this model to the current U.S. economy, and then compute the optimal degree of progressivity required in the U.S. benefit-earnings rule. I also examine the labor market implications of this benefit-earnings link, both in terms of the fraction of lifetime spent in employment, and also in terms of the hours per week.

Grant Product

Differential Mortality and the Progressivity of Social Security
Upjohn Institute working paper 16-263, 2016

Differential Mortality and the Progressivity of Social Security?
Towson University Working Paper No. 2016-03 (2016)

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