Future Social Security Research Articles

The Effects of Increasing the Full Retirement Age from 66 to 67 on the Retirement Decision at the Early Retirement Age of 62

In the United States, the full retirement age increases in two-month increments each year until reaching 67 years of age in 2027 for individuals born from 1955 to 1960. The increase in the full retirement age is equivalent to a decline in the Social Security benefits for all new retirees. If the full retirement age is increased from 66 to 67 while the early retirement age remains at 62, then the monthly benefit reduction at age 62 would increase from 25% to 30%. Despite the reduction in Social Security benefits, a significant portion of newly retired workers claim their Social Security benefits as soon as they turn 62, which is the earliest age to claim the benefit. The Social Security Administration predicts that the reduction in Social Security benefits can encourage workers to delay their retirement and that the reduction can restore some financial balance to the Social Security system. Therefore, studying the effects of increasing the full retirement age from 66 to 67 on the retirement decision at 62 is essential for planning future social security reforms. This study conducts a Two-Stage Least Squares (2SLS) regression, using cross-sectional and time series data from the Behavioral Risk Factor Surveillance System (BRFSS) from 2016 to 2021. The empirical results show that the probability of retirement for individuals at age 62 decreased from 2016 to 2021, indicating a trend of delaying retirement as their full retirement age rises. During the same period, the likelihood of men reporting being retired decreases by 35.56%, while for women, it drops by 16.79%. It implies that if male and female workers choose to exit the workforce solely based on the Social Security benefits, the increase in full retirement age appears to have a more significant impact on delaying retirement decisions for male workers than for female workers.

Markov equilibrium of social security: An analytic solution under CRRA utility and the future of social security

The politico-economic sustainability of pay-as-you-go social security has been studied with the help of two-period overlapping generation models under Markovian equilibrium concepts. The literature has mostly used logarithmic utility for tractability, whereas versions under the more general isoelastic CRRA utility have only been analyzed computationally. This paper demonstrates that a prototypical social security model under CRRA utility has a closed-form solution; it revisits previously obtained computational conclusions and presents new findings and extensions. Quantitatively, the model can explain the observed path of payroll tax rates in the USA and predicts increased tax rates as the equilibrium response to lower future population growth rates. The model predicts a gradual increase in tax rates, from the current 12.4% to about 15% or so in 2060, and then staying at that level. Benefits are expected to decrease slowly, by about 2% (or less) per decade, starting in 2030.

Understanding the Relationship Between Decreases in Social Security Benefits and Intergenerational Inequalities in Mental Health.

It is well-established that mental health follows similar patterns across generations. However, little is known how structural factors, such as those related to social security reforms, may impact this relationship. Our aim was to quantify the strength of association in mental health between parents and their adolescent children, and to explore how much of this correlation is explained by decreases in benefits. We used data from U.K. Household Longitudinal Study (2009-2019) from which we matched youth data to their parents, and split the sample into single- and dual-parent households. To estimate the intergenerational correlations, we estimated a series of unit- and rank-based regression models of standardized and time-averaged mental health measures for adolescents and their parents. Our findings suggest that there are statistically significant intergenerational associations in mental health between parents and children for both single- and dual-parent households, with the relationship being stronger for single-mother households. Benefit losses explain a small proportion of this association, for both single-mother and dual-parent households. Nevertheless, they are negatively associated with the mental health of adolescents in dual-parent households-independently of both adolescent and parental characteristics. Such negative effects should be considered when designing and evaluating future social security benefit policies.

Освітнє середовище університету як чинник формування управлінської культури майбутнього фахівця соціального забезпечення

The article substantiates the educational environment of the university as a factor in shaping the management culture of the future social security specialist. The resources (personal, organizational, social partnership) of the educational environment of the university in the formation of the management culture of the future social security specialist are characterized. Subject-spatial, value-based content-technological, organizational-managerial, subjective components of the educational environment of a higher education institution are considered. The signs of polyvariance of the university environment in the formation of the parameters of the management culture of the future social security specialist are determined. It is proved that the multivariate educational environment of the university allows to solve the problem of forming the management culture of the future social security specialist through the use of his resources in the educational process, in extracurricular activities, in the organization of independent student work. Pedagogical influence of environmental resources on the student, ensures his active involvement in educational, research, creative extracurricular activities, increases the level of managerial knowledge, provides an opportunity to practice management skills, forms professional and managerial values.

Теоретичні основи формування управлінської культури майбутнього фахівця соціального забезпечення в освітньому середовищі закладу вищої освіти

The article reveals the theoretical foundations of the formation of management culture of the future social security specialist in the educational environment of higher education. It is substantiated that a social security specialist in modern conditions is a manager who must be able to form a team, develop and implement social programs and projects, create a socially healthy society, establish social contacts, carry out social partnership. Models of professional training of social workers in the university are analyzed. Didactic modules of formation of managerial culture of the future specialist in higher educational institution are considered. The content of professional competencies (socio-psychological, legal, organizational, economic, informational, marketing, consulting) of the future specialist in the social sphere as a subject of managerial activity is revealed. The expediency of wide application of personality-oriented, organizational, environmental, effective, competence approaches in the formation of the management culture of the future social security specialist is substantiated.

Social Security Uncertainty and Demand for Retirement Saving

The life‐cycle model predicts an association between increased demand for retirement saving and the level of expected future social security benefits. The precautionary saving model shows that the risk associated to future benefits also matters. If social security benefits become more uncertain, individuals should react by increasing their demand for retirement saving. To assess the empirical relevance of this mechanism, we relate individual level measures of social security risk to demand for retirement saving vehicles. Using the Bank of Italy Survey of Household Income and Wealth, we find higher participation in private pension funds among individuals who expect lower and more uncertain social security benefits.

Social Security: Past, Present and Future

Over the past century, social security in advanced economies has been transformed, and in this paper the history of its growth and some of the causes are reviewed. Yet poverty has not ended and many question the future of social security. Four systems of social security are discussed: social assistance, social insurance, targeted universal benefits and universal basic income. Possible reforms and steps to promote the survival of social security as a core element of a just and civilised society are proposed.

Relaxing household liquidity constraints through social security

More than a quarter of working-age households in the United States do not have sufficient savings to cover their expenditures after a month of unemployment. Recent proposals suggest giving workers early access to a small portion of their future Social Security benefits to finance their consumption during the COVID-19 pandemic. We empirically analyze their impact. Relying on data from the Survey of Consumer Finances, we build a measure of households' expected time to cash shortfall based on the incidence of COVID-induced unemployment. We show that access to 1% of future benefits allows 75% of households to maintain their current consumption for three months in case of unemployment. We then compare the efficacy of access to Social Security benefits to already legislated approaches, including early access to retirement accounts, stimulus relief checks, and expanded unemployment insurance.

Mortality dynamics and the statutory retirement age proposal: an actuarial view

ABSTRACT This paper aimed to apply (dynamic and static) actuarial models to calculate the balanced contribution rates for the planned (at the minimum age) retirement benefit of the General Social Security System, based on the original and substitutive texts of the reform proposed by Michel Temer’s government. Even with the regular increases in life expectancy and the long-term nature of the analyses, national studies on social security are typically based on the static mortality hypothesis. The relevance of this study is evident due to the demographic changes, particularly the increase in life expectancy, experienced by the Brazilian population in recent decades and which put in question the sustainability of the national pension system. The use of dynamic actuarial models allows for more accurate discussions about the future of social security, besides contributing to the still scarce national literature. Static and dynamic actuarial models were applied to a representative individual, adjusting mortality tables from the United Nations covering 1950 to 2100. It was verified that the actuarially fair rates calculated by the dynamic actuarial model are typically higher than those obtained by the static model, especially for women. This difference is expected to increase as gains in life expectancy become more influenced by the reduction in mortality at more advanced ages. Moreover, if the social security reform is approved (in accordance with either the original or the substitutive text), there are indications from the dynamic model that the contributions rates currently charged would be excessive for men. In turn, these rates would be excessive for women considering the original text, and closer to the actuarially fair value considering the substitutive text. The development, disclosure, and regular updating of official dynamic tables (whether for mortality or other biometric assumptions) are also recommended.

Vagrants and Vagabonds: Poverty and Mobility in the Early American Republic by Kristin O'Brassill-Kulfan

Reviewed by: Vagrants and Vagabonds: Poverty and Mobility in the Early American Republic by Kristin O'Brassill-Kulfan Nicole Schroeder (bio) Vagrants and Vagabonds: Poverty and Mobility in the Early American Republic. By Kristin O'Brassill-Kulfan. (New York: New York University Press, 2019. Pp. 280. Cloth, $35.00.) In 1820, the Society for the Prevention of Pauperism in New York remarked, "public attention has been awakened: the sources of poverty and crime are becoming subjects of daily inquiry" (184). The very same contentions over community and welfare services flash across our headlines every day. Travel bans, issues of immigration, the future of Social Security, and rights to accessible health care are amongst the most debated topics in the current political scene. Studying the very emergence of these crises in early American public life, as well as their legal, political, and economic underpinnings, O'Brassill-Kulfan offers a seminal example that pushes the boundaries of the history of welfare and poverty in Vagrants and Vagabonds. Focusing on the Mid-Atlantic as a space of meeting and migration, O'Brassill-Kulfan centers her narrative on the city of Philadelphia, which houses her most complete record set, while tying in sources from New York, New Jersey, Delaware, and Maryland to counterbalance her predominantly Pennsylvania-based narrative. She grounds her study in the decades of the early republic, reaching back to English and colonial precedents in order to contextualize changes occurring throughout the early nineteenth century. Vagrants and Vagabonds covers a range of individuals who partook in illicit mobility in the early republic. Coining the term "indigent transiency" as an "epistemologically inclusive term" for those deemed vagabonds, idlers, vagrants, tramps, and hoboes, O'Brassill-Kulfan groups individuals together across racial, ethnic, gendered, and labor-status lines. She argues that this mode of existence, along with individual identity politics, "determined how the poor lived, interacted with, and were [End Page 577] viewed by the local and state governments and their representatives, both under the law and by law enforcement" (2). O'Brassill-Kulfan argues that a study of indigent transiency, as regulated by the state, experienced by individuals, and rhetorically discussed in mainstream society, offers a clearer understanding of poverty and class in the early republic. Vagrants and Vagabonds asserts that transiency was at the heart of everyday public issues and that "indigent transiency defined community membership, and, by extension, American citizenship at the street level" (6). Reclaiming voices of vagrants, O'Brassill-Kulfan reanimates official documents by detailing positions from those on both sides of the welfare process. In a style reminiscent of Seth Rockman's Scraping By: Wage Labor, Slavery, and Survival in Early Baltimore (Baltimore, 2008) or Simon Newman's Embodied History: The Lives of the Poor in Early Philadelphia (Philadelphia, 2003), O'Brassill-Kulfan breathes fresh air into an archive of government records that are too often read as mere instruments of surveillance and control. While paupers were coerced into interviewing with government agents about their residency status and previous movements, O'Brassill-Kulfan argues they manifested a degree of agency by which paupers "resist[ed] the definitions assigned to them … in order to assert their own, self-defined identity" (133). Vagrants and Vagabonds offers a lens into both the theoretical underpinnings and the everyday processes of America's early welfare system. Most charged with vagrancy lived highly mobile lives, moving frequently to follow harvest cycles, public-works projects, and trade networks. Despite the natural mobility of wage labor, vagrancy laws demanded restricted movement in an effort to limit social welfare provisions to those who had supported their local system for years. Indigent transients were viewed with distrust, as their very mobility subverted the norms of "capitalistic morality." Individuals were expected to pay into their community, a capitalist expectation that prevented the withdrawal of labor from the local economy. In a rapidly industrializing and urbanizing landscape, however, this residency expectation was not possible for those looking for "amenable circumstances both in employment and in the availability of assistance" (38). The characters of Vagrants and Vagabonds traded residency for the possibility of climbing out of poverty. Relocating to a new place was fraught with peril. If an individual was perceived as...

Reforming Social Security: The Challenge of Income Inequality

Objective: This article examines the role Social Security plays in alleviating poverty among retirees in the context of threats to its solvency. Method: Examining long-term employment trends, declining access to defined benefit pensions and saving behavior can determine if in the more future Social Security beneficiaries are likely to be poor. Results: Labor market trends driven by technical change, global competition and increasing demand for services indicate that more future retirees will have lower life-time earnings that yield lower social security benefits and reduced saving for retirement. Coupled with a significant decline in defined benefit plans, older Americans are more likely to face more financial hardship after they can no longer work. Conclusion: Poverty among retirees will rise unless social security benefits for low-income retiree are increased. Cutting benefits for high-income retirees can erode political support for Social Security, suggesting that general revenue is the best source of funding to combat poverty among older Americans. Taxing wealth is a possible source of revenue.

Irrational Expectations, Future Social Security Benefits, and Life Cycle Planning

An extensive amount of literature examines the impact of expectations on economic behavior at both the micro and macro level. In the area of individual financial security, research taking into account the difference between rational expectations and actual behavioral expectations regarding asset returns, inflation, savings, and spending has contributed to better understanding and improved program design. In contrast, relatively little attention has been paid to workers’ expectations of their future Social Security benefits. Because Social Security benefits are an important source of retirement income for most workers in many countries, future Social Security benefit expectations presumably play an important role in their consumption, saving, labor supply, and portfolio investment decisions. This article surveys the literature relating to these expectations and presents evidence of workers’ expectations of future Social Security benefits in Canada, Ireland, and the United States. In all three countries, with differing systems of financing and differing politics concerning the programs, surveys find a surprising degree of pessimism and lack of trust in Social Security programs. Although rhetoric in the United States about Social Security being “broken” may be part of the explanation there, such rhetoric is not present in Canada and Ireland.

Social Security Benefit Valuation, Risk, and Optimal Retirement

We develop techniques to estimate the present day value of the future social security benefits of a retiree based upon their chosen date of retirement, the term structure of interest rates, and life expectancy forecasts. These valuation methods are then used to determine the optimal retirement time of a beneficiary given a specific wage history and health profile in the sense of maximizing the present day value of future cashflows. We then examine how a number of risk factors including interest rates, disease diagnosis, and population life table risks impact the current value of future payments. Specifically, we utilize principal component analysis in order to assess interest rate and population life expectancy variation risks. We then examine how such risks range over distinct income and demographic groups and finally summarize future research directions.

PENSION DEFICIT IN BRAZILIAN SOCIAL SECURITY SYSTEM: LEGAL REMARKS AND STRATEGIES TOWARDS FINANCIAL SUSTAINABILITY

The present article consists in the brief analysis of the evolution of the Brazilian General Regime Social Security, depicting its frailty against subsequent legal reforms through which it has passed in recent years. It also deals with the impact of socioeconomic changes on the current and future financial sustainability of the Brazilian pension system. In fact, the evolution of the statistics concerning such social indicators can be quite decisive for the future sustainability of the Brazilian social security system. For this, we used the phenomenological method - hermeneutics, by privileging theoretical studies and analysis of documents and texts. Such research is very important in order to provide a glimpse of the general social security regimen in Brazil and its future prospects. The main results show that there is a budgetary concern due to the growth in life expectancy and declining birth rate. Even with the absence of the current financial deficit proclaimed by the media and the federal government, there will be the need for reform to fit the budget of Brazil’s future Social Security System. According to our analysis, the improvement of Brazilian Social Security requires legal autonomy of the Social Security Revenue (thus preventing the withdrawal of it funds to defray social security benefits belonging to another public sectors), the increase of minimum wage in the country, and public policies to stimulate the entry of informal workers in the General Social Security Regimen. Furthermore, this article suggests that, as a matter of immediate public policy, the Brazilian government should focus more energetically in improvement of educational systems, which presents itself as a strong indicator for the improvement of social welfare budget.

PENSION DEFICIT IN BRAZILIAN SOCIAL SECURITY SYSTEM: LEGAL REMARKS AND STRATEGIES TOWARDS FINANCIAL SUSTAINABILITY

The present article consists in the brief analysis of the evolution of the Brazilian General Regime Social Security, depicting its frailty against subsequent legal reforms through which it has passed in recent years. It also deals with the impact of socioeconomic changes on the current and future financial sustainability of the Brazilian pension system. In fact, the evolution of the statistics concerning such social indicators can be quite decisive for the future sustainability of the Brazilian social security system. For this, we used the phenomenological method - hermeneutics, by privileging theoretical studies and analysis of documents and texts. Such research is very important in order to provide a glimpse of the general social security regimen in Brazil and its future prospects. The main results show that there is a budgetary concern due to the growth in life expectancy and declining birth rate. Even with the absence of the current financial deficit proclaimed by the media and the federal government, there will be the need for reform to fit the budget of Brazil’s future Social Security System. According to our analysis, the improvement of Brazilian Social Security requires legal autonomy of the Social Security Revenue (thus preventing the withdrawal of it funds to defray social security benefits belonging to another public sectors), the increase of minimum wage in the country, and public policies to stimulate the entry of informal workers in the General Social Security Regimen. Furthermore, this article suggests that, as a matter of immediate public policy, the Brazilian government should focus more energetically in improvement of educational systems, which presents itself as a strong indicator for the improvement of social welfare budget.

PENSION DEFICIT IN BRAZILIAN SOCIAL SECURITY SYSTEM: LEGAL REMARKS AND STRATEGIES TOWARDS FINANCIAL SUSTAINABILITY

The present article consists in the brief analysis of the evolution of the Brazilian General Regime Social Security, depicting its frailty against subsequent legal reforms through which it has passed in recent years. It also deals with the impact of socioeconomic changes on the current and future financial sustainability of the Brazilian pension system. In fact, the evolution of the statistics concerning such social indicators can be quite decisive for the future sustainability of the Brazilian social security system. For this, we used the phenomenological method - hermeneutics, by privileging theoretical studies and analysis of documents and texts. Such research is very important in order to provide a glimpse of the general social security regimen in Brazil and its future prospects. The main results show that there is a budgetary concern due to the growth in life expectancy and declining birth rate. Even with the absence of the current financial deficit proclaimed by the media and the federal government, there will be the need for reform to fit the budget of Brazil’s future Social Security System. According to our analysis, the improvement of Brazilian Social Security requires legal autonomy of the Social Security Revenue (thus preventing the withdrawal of it funds to defray social security benefits belonging to another public sectors), the increase of minimum wage in the country, and public policies to stimulate the entry of informal workers in the General Social Security Regimen. Furthermore, this article suggests that, as a matter of immediate public policy, the Brazilian government should focus more energetically in improvement of educational systems, which presents itself as a strong indicator for the improvement of social welfare budget.

THE FUTURE OF SOCIAL SECURITY

(with an introduction by Daniel L. McFadden)The past and the present processes leading to social security legislation inform expectations regarding the future of social security, and with international comparisons, provide lessons to those who would learn them. (JEL H55)

QUESTIONS AND ANSWERS: THE FUTURE OF SOCIAL SECURITY

Comments, questions, and answers about the future of Social Security. (JEL H55)

Spending like a state: (In)formal credit, the local government and the rescaling of insecurities

This paper examines informal credit practices in a remote Hungarian village. It explores the central role informal credit plays in people’s present and future social security as they strategize about using various resources amid large-scale unemployment and limited local resources. It furthermore explains the reasons for the local prevalence of the former, the ways such credit is used by individuals and families vis-à-vis other informal and formal arrangements, and how the users are morally judged. The analysis puts special emphasis on the links between individual practices of informal credit, the distributional practices of the local state, and broader socio-political tendencies. In doing so, the study reveals that the indebtedness of the local government and its short-termist distributional practices on the one hand, and the indebtedness of local unemployed people and the short -termism evident in their spending on the other can be linked to the same phenomenon; namely, the rescaling of insecurities.

Digital economy and the future of social security

Digital economy and the future of social security