The True Cost of Social Security

Alexander W. Blocker, Laurence Kotlikoff () and Stephen A. Ross

No 14427, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Implicit government obligations represent the lion's share of government liabilities in the U.S. and many other countries. Yet these liabilities are rarely measured, let alone properly adjusted for their risk. This paper shows, by example, how modern asset pricing can be used to value implicit fiscal debts taking into account their risk properties. The example is the U.S. Social Security System's net liability to working-age Americans. Marking this debt to market makes a big difference; its market value is 23 percent larger than the Social Security trustees' valuation method suggests.

JEL-codes: G12 G13 G23 G38 H2 H55 H6 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pub
Date: 2008-10
Note: PE
View list of references View citations in EconPapers

Downloads: (external link)
http://www.nber.org/papers/w14427.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:14427

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14427
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 ().