Rising Tides and Retirement: The Aggregate and Distributional Effects of Differential Wage Growth on Social Security
CRR WP No. 2009-7
31 Pages Posted: 30 Mar 2009
There are 2 versions of this paper
Rising Tides and Retirement: The Aggregate and Distributional Effects of Differential Wage Growth on Social Security
Date Written: March 2009
Abstract
Recent growth in wage inequality has important implications for Social Security solvency and the distribution of benefits. Because only earnings below the taxable maximum are subject to Social Security payroll taxes, wage growth that is concentrated among very high earners will generate lower tax receipts than wage growth that is more evenly distributed. The progressivity of the Social Security benefit formula increases benefit payouts when the share of workers with low wages grows. This study uses a dynamic microsimulation model to examine the aggregate and distributional consequences of alternative scenarios about the distribution of future wage growth among workers. We find fairly marked changes in projected Social Security benefit distributions, poverty, and long-term financing status with relatively modest changes in assumptions about wage differentials.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Trends in U.S. Wage Inequality: Re-Assessing the Revisionists
By David H. Autor, Lawrence F. Katz, ...
-
Trends in U.S. Wage Inequality: Re-Assessing the Revisionists
By David H. Autor, Lawrence F. Katz, ...
-
Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles
By David Card and John E. Dinardo
-
The Polarization of the U.S. Labor Market
By David H. Autor, Lawrence F. Katz, ...
-
Rising Wage Inequality: The Role of Composition and Prices
By David H. Autor, Lawrence F. Katz, ...
-
Rising Wage Inequality: The Role of Composition and Prices
By David H. Autor, Lawrence F. Katz, ...
-
Changes in the Labor Supply Behavior of Married Women: 1980-2000
By Francine D. Blau and Lawrence M. Kahn
-
Revisiting the German Wage Structure
By Christian Dustmann, Johannes Ludsteck, ...
-
Quantile Regression Under Misspecification, with an Application to the U.S. Wage Structure
By Joshua D. Angrist, Victor Chernozhukov, ...