Social security trust fund flows and the welfare costs of rent seeking

Abstract

The current study provides estimates from a Parks regression (using panel data) that suggest that the welfare costs due to rent seeking efforts by interest groups to obtain Social Security trust fund flows ranged from approximately $132 million (per twoyear federal election cycle from 1985–1994) to a theoretical expectation of $66 billion, all in real terms. These welfare costs are in addition to any other social costs that may be present, including the reduced levels of national saving that Social Security may induce.