New PDF release: Income Redistribution from Social Security

By Don Fullerton

ISBN-10: 0844742147

ISBN-13: 9780844742144

The authors investigate the significance of figuring out up to attainable approximately how the present Social protection method redistributes cash in perform and to whom.

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Extra info for Income Redistribution from Social Security

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Results are similar for the 1956–60 birth cohort, except that net benefits also turn negative for the top two quintiles. Due to the endogeneity of income, however, many researchers do not want to use income directly as a determinant of mortality. Income typically falls before death. Therefore, some choose to have mortality depend on 30 INCOME REDISTRIBUTION FROM SOCIAL SECURITY something that does not change close to death but is correlated with income, like education. Liebman (2002), for example, adjusts mortality for differences according to sex, race, and education, although he does not adjust mortality for direct income effects.

4 Seven Factors That Affect Redistribution In this chapter, we discuss seven different factors that can affect the measurement of redistribution. All the measures in the literature require calculations of Social Security taxes paid and benefits received for every individual in the sample. To compute these amounts over the course of a lifetime, we need to know several things. Specifically, the net Social Security transfer is a function of mortality, income, tax rates, the discount rate, and the age at retirement.

Hurd et al. (2001) estimate that mortality rates for married people are 21 percent lower than rates for similar singles. In sharp contrast to Lillard and Waite, Hurd et al. ” Both Lillard and Waite (1994) and Hurd et al. (2001) assume married and unmarried people are no different, once controlling for other variables such as income. Yet, “in fact, people who lead unsettled lives while married—drinking, smoking, staying out late—are probably precisely the people who are more likely to find themselves unmarried later.

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Income Redistribution from Social Security by Don Fullerton

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