Pay-as-you-go Social Security and the aging of America: an economic analysis
Alan D. Viard
Because it is a mature pay-as-you-go retirement system, Social Security provides current and future workers with below-market returns. These workers bear the burden of the unfunded liability arising from windfall gains to past retirees. Alan D. Viard uses these principles to examine the effects of three demographic developments: the low birthrate since the baby boom ended in 1965, the impending retirement of the baby boomers, and the downward trend in old-age mortality. The low birthrate reduces Social Security’s long-run rate of return as the unfunded liability is spread across fewer workers. The boomers’ retirement does not pose a separate problem, but marks the end of the temporary gains provided by the high birthrate during the boom. Because the downward mortality trend does not change Social Security’s long-run rate of return or the number of workers across whom the unfunded liability can be spread, it need not change any worker’s burden. However, policy responses to the trend are likely to shift burdens from earlier generations to later ones.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.