Differential Mortality and the Progressivity of Social Security
Publication Date
1-1-2015
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 No. 16-263, 2016
Differential Mortality and the Progressivity of Social Security
Towson University Working Paper No. 2016-03, 2016
Bagchi, Shantanu. 2019. "Differential mortality and the progressivity of social security." Journal of Public Economics 177. https://doi.org/10.1016/j.jpubeco.2019.07.003