Alternative Methods of Price Indexing Social Security: Implications for Benefits and System Financing

Andrew G. Biggs, Jeffrey Robert Brown () and Glenn Springstead

No 11406, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper explains four methods of "price indexing" initial Social Security retirement benefits, and discusses the effect of each method on the fiscal sustainability of Social Security, benefit levels and replacement rates, redistribution, and sensitivity of system finances to demographic and economic shocks. Of these methods, PIA Factor Indexing would generate the largest cost savings while reducing benefit growth at approximately an equal rate for all income levels. Methods that index the AIME, the formula "bend points," or both, would reduce benefit growth at a slower rate and would have different effects on benefit distribution and system sustainability.

JEL-codes: H55 J14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2005-06
Note: AG PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w11406.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:11406

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11406
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc
Address: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Contact information at EDIRC.
Series data maintained by ().