Abstract
There has been a great deal of discussion in recent years regarding the implications of the shift from defined-benefit to defined-contribution retirement plans on workers’ ability to adequately provide for their retirement security needs. There has been almost no discussion about the changing economics of participation in the U.S. Social Security pension system and the implications for the burden on workers attempting to save for retirement. In its early years, Social Security benefits were highly subsidized and now present an implicit tax on retirement saving for many workers. The analysis here presents the magnitudes of these shifts for workers at different points in the earnings distribution.
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