Abstract
Although Social Security Old Age Insurance (OAI) is similar in some respects to a private annuity, benefits typically contain large intercohort and intra-cohort redistribution components. The former are declining over time but the latter are a permanent feature of the program. This study disentangles the actuarially fair and redistributive elements in OAI benefit payments to a sample of individuals from the 1962–1972 retirement cohorts. Incidence of benefits, actuarially fair annuity payments, and redistributive components across income groups are presented in tabular form. Regression analysis is used to estimate the relationship between redistribution components, as a percentage of benefits, and various characteristics of the retirement population.
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