Social Security Account Research Articles

Determinants of Special EPF Withdrawals among Malaysian Employees Amidst the COVID-19 Pandemic

In response to the COVID-19 pandemic, Malaysia has implemented various financial relief measures to support those adversely affected by the crisis. These measures primarily target individuals who have experienced job loss or a reduction in wage due to the pandemic. One of the options available to individuals was the premature withdrawal from their social security account, specifically the Employees Provident Fund (EPF) account, through various programs such as i-Lestari, i-Sinar, and in 2021, i-Citra, and also “Pengeluaran Khas,” in 2022, even though such withdrawals are said to be potentially risky. Conducting a qualitative method by using an in-depth interview, this paper determines the factors associated with employees’ EPF withdrawals during the COVID-19 pandemic in Malaysia. Therefore, this paper identifies the factors of withdrawals and the relationship between characteristics such as financial hardship, precautionary demand for cash, uncertainty over finances, and immediate financial obligations and uses it as a guideline for building a framework to enhance the current social security system in Malaysia and manage future unforeseen crises. Based on the findings, this study proposes a range of policies based on the identified factors of early EPF withdrawals.

The Effects of Social Network and Institutional Embeddedness on Household Consumption: Evidence from China Household Finance Survey

Consumer behavior is embedded in a certain social structure and social networks, and the scale and density of household social networks will be likely to affect consumption expenditure. To explore the impact of social networks and institutional embeddedness on household consumption, this study constructs a model of consumption influencing factors, and devises an empirical study using the data of China Household Finance Survey (CHFS). The results show some innovation. (1) The impact of household social networks on total household consumption is significant. A 1% increase in social networks spending boosts household consumption spending by 0.364%. (2) The institutional embeddedness will affect household consumption. Every 1% increase of social security account balance (the proxy variable of institutional embeddedness) can boost household consumption by 0.196%. This proves that the social insurance institution can enhance consumer confidence and promote current consumption growth. (3) The results of the robustness test confirmed that even after replacing the dependent variable with “the proportion of developmental consumption in total household consumption,” the influence of social networks and institutional embeddedness on consumption is still significant. Using the variable “communication expenses” instead of “gift income and expenditure” as the proxy variable of social networks, the estimation result is still robust. (4) Social networks have a significant influence on all types of household consumption except medical care consumption, but the degree of influence is different. Further discussion revealed that the estimation results are different for different regions in China, but the coefficients of core independent variables are not significantly different. This conclusion is different from people’s intuition, which holds that people in regions with low economic development rely more on social communication and spend more on social communication to maintain a certain social status. The conclusion of this paper is of great significance for formulating policies and institutions affecting residents’ consumption.

Health insurance and poverty of the older population in the United States: The importance of a health inclusive poverty measure

For decades, the US poverty rate has been lower among those 65 and older than among those under 65, due to more generous public transfers to the older population (Preston, 1984; Moffitt, 2015). Yet this comparison understates true poverty differences because it does not capture the greater eligibility for health insurance benefits among those 65 and older. We use a Health Inclusive Poverty Measure (HIPM; Korenman and Remler, 2016), which incorporates health needs and benefits, to estimate poverty rates and impacts of health insurance and other benefits on poverty. For those 65+, the HIPM poverty rate was nearly 2 percentage points lower than Census’ Supplemental Poverty Measure (SPM) rate, while for younger persons, the HIPM rate was 1.6 percentage points higher, due to their greater unmet health insurance needs. Among those 65+, Medicare and Social Security account for reductions in HIPM poverty of 15 to 25 percentage points and 35 to 40 percentage points, respectively. The average HIPM poverty gap after all transfers was 4% of the HIPM threshold among persons 65+ vs. 13% among those under 65. Compared to the SPM, the HIPM appears to classify a needier population as poor. Adopting a HIPM could provide more complete description of disadvantage across the age distribution and more accurate guidance for social policy (NAS 2019).

Resuscitating Private Social Security Accounts: Countering Inequality With Panic and Prevarication.

This article, originally published in Dollars & Sense: Real World Economics , is being reprinted in New Solutions to bring attention to efforts to privatize, dismantle, and fail to protect and expand the U.S. Social Security system. Social Security is an essential element for protecting the health, safety, and well-being of retired U.S. workers and their family members. This article explains attempts to weaken the system and efforts that can be made to sustain the system. The author asks and responds to the question, “Why then would anyone swap a highly successful Social Security system that provides life insurance as well as disability and retirement benefits for private retirement accounts?”

The Economic Effects of Private Social Security Accounts

Since the 1980s, over 30 countries have implemented various kinds of personal social security accounts. Most counties have adopted them as a part of their social security systems, to also continue to fund their public pay-as-you-go system. This paper analyzes the effects of adopting private accounts, as well as the percentage of income paid into private accounts, on GDP per capita growth. Global panel-data regressions over time are used, as well as sample splits for developing countries and Latin America, where many countries adopted some form of private account following Chile’s ground-breaking example of a complete switch from public to private social security system. The paper estimates statistically significant effects of privatizing parts or all of social security on countries’ GDP per capita growth. They also benefit stock market growth and enrollment rates in secondary and higher education, as well as in reducing government expenditures and national debt.

The Effects of Private Social Security Accounts on Economic Growth in Eastern Europe

Eastern European countries have been transitioning out of communism and some have followed the Latin American and European countries’ path of changing from a public social security system, toward a system that includes private accounts. They have chosen mixed systems with private as well as government funded parts to also sustain the previous pay-as-you-go system where workers paid for those retired. This research uses panel data and regression analysis for the Eastern European countries to estimate the impact of using some form of private accounts, or the percentage of income paid toward private accounts, on economic growth of GDP per capita. The impact on economic growth is statistically highly significant throughout all regressions with a large positive impact on the percentage of economic growth of GDP per capita from allocating higher percentages of income toward private accounts.

U.S. Fiscal Policy in an Era of Federal Budget Surpluses

Gokhale examines how the US budgetary surpluses can best be managed in view of the long-term expenditure pressures that the Social Security and Medicare programmes will exert on the US federal government budget. He notes that the worsening of the American fiscal outlook in 2002 postpones but does not entirely eliminate the need to think about how to deal with a potential cash accumulation with the federal government. If the surpluses turn out to be so large that debt is eliminated and a sizeable cash reserve accumulates with the government, the funds will have to be invested in private assets. Gokhale considers four policy options, in which the assets are respectively managed by the Federal Reserve, the US Treasury, the Social Security Trust Fund (SSTF) and by private individuals via an individual Social Security account system. The last solution implies that the surpluses of the SSTF are invested in marketable debt which is attributed to individual Social Security accounts. Individuals can then trade the public bonds for private stocks and bonds. The alternative solutions are evaluated on the basis of four objectives: preserving a liquid public debt market, minimising deadweight losses from inefficient resource allocation by the government, allowing diversification of pension portfolios and improving intergenerational risk sharing. According to Gokhale, the use of surpluses to start an individual Social Security account system is the best solution.

Bush Plan Takes Security Out of Social Security

President Bush's plan for social security is putting my friend Veronica's retirement jeopardy. Age 51, an African American woman with an MBA, paying private school tuition for an accomplished son, Veronica worked for 10 years for a subsidiary of Enron. When the scandal she lost the entire pension she had worked to accumulate. Veronica viewed our social security system the way that it was designed: as the foundation on which to build an individual retirement plan. When the bottom fell out of Enron, there was nothing left to support her retirement--nothing except for the foundation that she had secured with her social security account. Unfortunately for Veronica, there is little security her social security account. Veronica is her early fifties--at a point history when President Bush proposes a transition to private accounts that will make benefits a risk-laden prospect for those her age group. Under President Bush's plan for social security, Veronica will not be able to keep the full benefits of the current program as will those over 65. Nor will she have time her work life for her invested money to (hopefully) grow like that of those their twenties. Veronica paid into her employer-organized pension plan and into our social insurance system, but if President Bush prevails, her benefits will be at risk. After her hard work and careful planning, she may have little to show for it. Social workers understand that assessing the implications of a policy for individual citizens like Veronica is often a good yardstick by which to measure the impact of a change. Moreover, social workers understand that policy change the United States flows from the political process as informed, when allowed, by rational analysis. We know that the social security system has been subject to extensive analysis, evaluation, and monitoring since its inception. These analyses consistently reveal that, despite President Bush's rhetoric, the system the United States is not busted, broke, or in crisis. Social security is an example of a program that works, that benefits all Americans. Indeed, between 1959 and 2000, the poverty rate for the elderly population fell from 35 percent to 10 percent largely because of it (Century Foundation, 2005). Yes, there are demographic dislocations. It has been understood for some time that without adjustment, demographic trends will produce a shortfall of funds available to pay benefits at some time the future. From the beginning of the program through the working years of the baby boom generation and continuing until 2018, however, workers pay more into the system than retirees and the disabled are paid benefits. This surplus is used to fund a trust fund that is invested government bonds and that, together with worker contributions, will, even under conservative estimates, be able to pay all promised benefits until 2042. At that time, benefits due the retiring baby boomers will begin to exceed the ability of the system to finance them. It is this dynamic that forces some adjustment (Andrews, 2005). It is galling that the president's proposed individual retirement accounts will do nothing to address these shortfalls. …

Social Security investment accounts: lessons from participant-directed 401(k) data

Newly available 401(k) participant investment data may have implications for individual Social Security account (IA) proposals. We found that women with wages between $25,000 and $50,000 have a significantly greater probability of investing a small percentage of their 401(k) in equities than their male counterparts, but those with salaries over $75,000 have a smaller probability. Hence, women’s less aggressive investment behavior may be primarily due to younger cohorts and may not apply above a threshold wage. However, overall, 28.4% of men and 33.8% of women are conservative investors, suggesting the possible risk low IA accumulations under some proposals.

Trends in Male Labor Force Participation and Retirement: Some Evidence on the Role of Pensions and Social Security in the 1970s and 1980s

This paper estimates the effects on steady state retirement by men of changes in plans and social in the 1970's and 1980's. Work incentives associated with coverage and plan characteristics are calculated primarily from the 1969-79 Retirement History Study and the 1983 and 1989 Surveys of Consumer Finances. Simulations with a structural retirement model suggest that the long run effects of changes in pension plans and social security account for about a quarter of the reduction in full-time work by men in their early sixties none of the trend for those age 65.

Cancer among nuclear test participants

<h3>In Reply.—</h3> We accept Dr Grossman's criticism that the fate of the 145 participants could markedly affect the outcome of the study but do not accept his implication that, because they could not be traced, they have all died. Some of the untraced 145 participants almost certainly have died and some of these of cancer, but how many? Of the 145, we knew the Social Security Account Number (SSAN) for 63. Evidence of death was not found after these were submitted to the Internal Revenue Service, Veterans Administration, and Social Security Death Registry. Those without an SSAN were checked through the Veterans Administration, National Personnel Records Center, Social Security Administration, and Federal Bureau of Investigation for either an SSAN or evidence of death. No other sources of data were available unless we had each name reviewed by each state for each of 22 years. Even if this had been done,

Impact of the War on Child Labor

NO AGE group in a nation is exempt from the effects of modern war. The children and youth of the United States have been spared the horrors suffered by the children in invaded lands, but they have been subject to the unrest and insecurity of the times, and for many of them health and education are being seriously jeopardized by premature work. During the period immediately prior to Pearl Harbor the increasing employment of children began to be apparent, particularly in defense centers. This trend was rapidly accentuated after the United States entered the war. Whereas in 1940 the census (taken during the last week of March) showed a total of 872,314 boys and girls between the ages of 14 and 18 at work, four years later (April 1944) government estimates indicated that about 3,000,000 in these age groups were at work. During the vacation months of 1944, probably at least 2,000,000 more were added to the youth labor force. A study of the issuance of employment and age certificates in certain areas during the last four years shows the rapidity of the increase and the growing extent of the employment of 14and 15-year-olds. Table 1 does not give the entire employment certificate picture, but shows the trend in certain comparable areas which send reports to the Children's Bureau of the United States Department of Labor. Another index of the volume and the trends of the employment of youth is found in the applications for Social Security account numbers during this period, shown in Table 2. It must be borne in mind that these figures do not give the total number of young persons at work at any one time, because the Social Security Act excludes certain occupations such as agriculture and domestic service in its coverage. Also, persons may secure account numbers without actually having a job or even a prospect of a job. Moreover, Social Security cards remain valid when jobs are changed, and many 17and 18year-olds now at work may have secured their cards two or three years ago. However, Table 2 gives some indication of the rate at which youth has sought to join the labor force during the war period. Many more boys than girls applied for account numbers in each of the years 1940 to 1943, but the rate of increase was much greater for girls than for boys. In 1943, although 1,600,000