Social Security Reform Research Articles

Narrating One Nation: The Ideology and Rhetoric of the Miliband Labour Party

Speaking at the 2012 Labour Party Conference, Ed Miliband set out his vision of ‘One Nation’. This article maps the core concepts of Labour's ideology and identifies the narratives used to argue for One Nation social security reform. It locates these narratives within Labour's traditions and demonstrates that they coalesce in the leadership persona of Miliband himself. Though an attempt to respond to a populist ‘rhetorical culture’, the article contends that this strategy has created a self-enclosed ideology that cannot conceive of an audience beyond itself. Labour therefore needs to overcome this solipsism if it is to secure victory in 2015.

Fertility Policies and Social Security Reforms in China

This paper analyzes the impact of relaxing fertility controls and expanding social security in China. We develop an overlapping generations model in which fertility decisions and capital accumulation are endogenously determined in the presence of social security. In our model, children are an alternative savings technology—as they transfer resources to their retired parents. Important feedback links arise between fertility and social security variables: an expansion of social security benefits reduces fertility—partially offsetting the effects of relaxing the one-child policy. The feedback loop between social security variables and fertility suggests that abandoning fertility restrictions may not be as effective in helping to finance China’s intended pension reform, especially if children are an important source of old-age support. The sustainability of the pension system is particularly at risk in the event of a growth slowdown. The objective of pension reforms may also be incongruent with other reforms, such as financial liberalization and financial integration.

A life-cycle model of unemployment and disability insurance

A general equilibrium life-cycle model is developed, in which individuals choose a sequence of saving and labor supply faced with search frictions and uncertainty in longevity, health status and medical expenditures. Unemployed individuals decide whether to apply for disability insurance (DI) benefits if eligible. We investigate the effects of cash transfer and in-kind Medicare component of the DI system on the life-cycle employment. Without Medicare benefits, DI coverage could fall significantly. We also study how DI interacts with reforms of Social Security and Medicare and find that DI enrollment amplifies the effects of reforms.

Pension Reform, Factor Mobility and Trade with Country-Specific Goods

This paper studies the effects of pension reform in a two-country model with country-specific goods. It shows that in the case of dynamic efficiency, a switch from a pay-as-you-go to a more-funded pension scheme leads to an inflow of labour to the reforming country. Reallocation of capital depends on the degree of substitutability between goods produced in the countries. If the goods produced in the countries are substitutes (complements), capital stock grows (declines) in the reformed country relative to the neighbouring country. Social security reform makes goods produced in the reformed country cheaper; this has an additional negative effect on the old generation in the reformed country, but compensates the old generation in the neighbouring country with cheaper imports due to a reduction in the tax base arising from emigration.

Effects of Social Security Reform on Private and National Saving

Social Security is the largest federal government spending program and one of the most popular. The earmarked payroll taxes that finance Social Security currently exceed benefit payments. By the end of 1996, the Social Security trust fund had accumulated about $566 billion in assets and was expected to grow to over $1.2 trillion by 2010. However, longer-term projections suggest that Social Security will face financial shortfalls. Using intermediate assumptions, the Social Security Trustees’ Report (1997) projects that benefit payments will exceed program revenue (payroll tax receipts plus interest income) beginning in 2019. Trust fund balances will then start to decline as reserves are liquidated in order to meet the payments due. In the absence of programmatic changes, full benefits will not be paid on time beginning in 2029. The actuarial deficit over the prescribed 75-year projection period is estimated to be 0.84 percent of GDP; this represents a combination of surpluses in early years and deficits in subsequent years. No official estimate of the actuarial deficit beyond the 75-year horizon has been made, and certainly major uncertainties accompany any distant forecasts, but it appears likely that the system will continue to fall further out of balance.

The Politics of Policy Change: Welfare, Medicare and Social Security Reform in the United States. By Daniel Béland and Alex Waddan. Washington, DC: Georgetown University Press, 2012. 240p. $29.95 paper.

The Politics of Policy Change: Welfare, Medicare and Social Security Reform in the United States. By Daniel Béland and Alex Waddan. Washington, DC: Georgetown University Press, 2012. 240p. $29.95 paper. - Volume 12 Issue 2

Book Reviews

Mary C. Daly of the Federal Reserve Bank of San Francisco reviews “The Other Welfare: Supplemental Security Income and U.S. Social Policy”, by Edward D. Berkowitz and Larry DeWitt. The Econlit abstract of this book begins: “Presents a historical chronicle of the development of the Supplemental Security Income program from its creation in 1972 into the twenty-first century. Discusses creating a new welfare program—the politics of welfare and social security reform in the Nixon Administration; a year in transition—why planning for the new program became difficult; launching the program—why the program began badly; the emergence of a disability program—how the program's fundamental identity changed; the continuing disability reviews—how the politics of controversy hindered the program; the courts and other sources of program growth—how the program expanded in a conservative age; the welfare reform of 1996—how the program became swept up in the narrative of welfare fraud and abuse; and post-1996 developments—a brief postscript. Berkowitz is Professor of History and Public Policy and Public Administration at George Washington University. DeWitt is former Public Historian with the U.S. Social Security Administration.”

Increased longevity and social security reform: questioning the optimality of individual accounts when education matters

In many European countries, population aging had led to debate about a switch from conventional unfunded public pension systems to notional systems characterized by individual accounts. In this article, we develop an overlapping generations model in which endogenous growth is based on an accumulation of knowledge driven by the proportion of skilled workers and by the time they have spent in training. In such a framework, we show that conventional pension systems, contrary to notional systems, can enhance economic growth by linking benefits only to the partial earnings history. Thus, to ensure economic growth, the optimal adjustment to increased longevity could consist in increasing the size of existing retirement systems rather than switching to notional systems.

Social Security Reform and the Full-Funding Concept

Social Security, more accurately the Old-Age, Survivors, and Disability Insurance (OASDI) program, is woefully underfunded as measured by the long-term actuarial balance. Its reserves, on deposit with the U.S. Treasury Department, will be depleted in 2033, notwithstanding the fact that there is no money there. The surpluses that created them following the 1983 Amendments ended in 2010. The so-called reserves have long since been spent on other government programs and obligations. Yet the fiction endures. This article examines the origins of the full-funding standard and then analyses the real funding problems of OASDI and how they are measured. If the OASDI is seen as the pay-as-you-go system that it is, its problems would be more easily managed.

The Politics of Policy Change: Welfare, Medicare, and Social Security Reform in the United States

The Politics of Policy Change: Welfare, Medicare, and Social Security Reform in the United States

The Federal Social Security Program: Taking Gender into Account - Submission to the Standing Committee on Human Resources Development and to the Federal Department of Human Resources Development

This report by the National Association of Women and the Law (NAWL) sets out a list of recommendation to the Standing Committee on Human Resources Development on the reform of the federal social security system. NAWL takes the view that Canadian women must be full and equal participants in creating social welfare policy and that the federal reform process should consider a fundamental objective to be the promotion of women's substantive equality. NAWL has made 26 recommendations for social security reform. Among these: Canadian women must be recognized as equal participants in social welfare policy decision-making. Social spending should not be targeted as a deficit reduction measure without a reassessment of all federal tax and spending policies. Social security reform must recognize women's market and non-market roles as mothers and as household labourers. Federal training programs must be accessible and accountable to women facing diverse needs. Literacy and language training should be considered a basic right. Part-time work should be fully insured under Unemployment Insurance, and treated equally under other federal employment programs and statutes. The federal minimum wage should be increased. Federal transfers for post-secondary education should not be replaced by an expanded income-contingent loan but instead, should be tied to education equity goals. The Canada Assistance Plan (CAP) should not be replaced with an unconditional block funding formula, or a funding formula tied only to increasing employability or reducing child poverty. Existing national conditions under CAP should be fully enforced, except to meet the distinct concerns of Quebec and Canada's First Nations. The CAP condition related to adequacy should be strengthened, and a non-discrimination condition be added. Willingness to participate in training or other employment programs should never be a pre-condition for receiving social assistance. Child poverty should be remedied by addressing the poverty of mothers. Universality in child benefit programs should be retained, but the greatest support should be provided to families with the greatest needs. Accessible child care should be a national priority, as it is a systemic barrier to women's equal access to education, training and employment. Issues around health, housing, immigration and settlement should be part of the social security review process, with special attention to the impact of any reform on women. Changes to the social security system should be made overtly, after full Parliamentary debate.

Transformation of the welfare state in Lithuania: Towards globalization and Europeanization

This paper is designed to shed some light on possible impacts of globalization and Europeanization on social security reforms in one of the new EU member state - Lithuania. The paper is based on 67 expert interviews conducted with the political elite, academics, journalists, senior civil servants, interest group representatives and the economic elite. The paper highlights the higher influence of globalization through the activities of such supranational agencies as the World Bank and the International Monetary Fund compared to the impact of cognitive Europeanization on social security reforms.

Social Security Reform and Policy Development in South Korea

Social Security Reform and Policy Development in South Korea

Fiscal crisis, social security reform and vulnerable population

The aging process we are witnessing in the majority of developed countries is raising financial sustainability problems in the pay-as-you-go pension system. The reforms designed to re-establish the financial equilibrium of pension systems may put one of the most important objectives of these systems at risk: to reduce the poverty rate among the elderly. This paper studies the effects that the reforms implemented in the Spanish pension system would have on the poverty rate of the retired population. The two main novelties presented are the following. First, the collective under study is focused on the most vulnerable workers. Second, the effects of the reforms are studied taking into account the labour market situation of the individuals in the years prior to retirement.

Social security reform and the community based integrated care system--what we expect for care management-.

Social security reform and the community based integrated care system--what we expect for care management-.

Housing Policy and Social Security Reform in Britain(<Special Issue>Social Policy and the Right to Housing)

Housing Policy and Social Security Reform in Britain(<Special Issue>Social Policy and the Right to Housing)

Good and Bad Times of Social Innovations: The Case of Universal Basic Income in Finland

AbstractThis article draws on innovation and agenda-setting theories to identify critical points in the realization of basic income in Finland. Our empirical data comprise 13 models of either unconditional basic income or social security reform proposals with some similarity to basic income. The models examined were published in Finland between 1984 and 2011. Using these data, we build a conceptual framework that enables us to discuss the role of the content, players, political and macro-economic context, and public interpretations in the successes and failures of the basic income initiatives.

Policy Variation, Labor Supply Elasticities, and a Structural Model of Retirement

This paper exploits a combination of policy variation from multiple pension reforms in Austria and administrative data from the Austrian Social Security Database. Using the policy changes for identification, we estimate social security wealth and accrual elasticities in individuals' retirement decisions. Next, we use these elasticities to estimate a dynamic programming model of retirement decisions. Finally, we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms.

Wpływ reformy emerytalnej na deficyt sektora instytucji rządowych i samorządowych

The social security reforms implemented against the background of deep imbalances in the labour market have generated a huge public debt, whose interest burden has been absorbing a growing part of state budget revenues. To reduce these expenses, some of the government’s tasks were transferred to local government. But in the absence of adequate financial resources this led to a sharp increase in debt in the local government sector. In 2009, the structural shortage of the general government budget was so large that the European Commission implemented an excessive deficit procedure against Poland, which remains in force. The reform of the open pension funds and other points of the fiscal consolidation program carry the promise that the budget target will be achieved in 2015. In the longer term, though, we should strive to increase inflows to the Social Insurance Fund instead of lowering the purchasing power of social security benefits.

Providing Longevity Insurance Annuities: A Comparison of the Private Sector versus Social Security

Recent U.S. Treasury Department proposals have focused attention on longevity insurance annuities that might be offered through pension plans. These are deferred annuities that begin payment at advanced older ages, such as age 82. However, pension plans are unlikely to offer longevity insurance annuities, because the unisex requirement makes them less advantageous for men, whose life spans are shorter, on average, than those of women. The United Kingdom has by far the world’s largest annuity market, and some U.K. insurance companies used to provide longevity insurance annuities; currently no companies do so. These annuities would benefit some older retirees, but the private sector has problems providing them. The author proposes that longevity insurance annuities be offered as a benefit through Social Security. As part of a package of Social Security reform, which no doubt will include benefit cuts, these benefits could be targeted to the needs of a vulnerable group—people at advanced ages with low benefits.