Adjusting Government Policies for Age Inflation

Gopi Goda and John Shoven ()
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John Shoven: Stanford Institue for Public Policy Research, Stanford University

No 08-062, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: Government policies that are based on age do not adjust to changes in remaining life expectancy and lower mortality risk relative to earlier time periods due to improvements in mortality. We examine four possible methods for adjusting the eligibility ages for Social Security, Medicare, and Individual Retirement Accounts to determine what eligibility ages would be today and in 2050 if adjustments for mortality improvement were taken into account. We find that historical adjustment of eligibility ages for age inflation would have increased ages of eligibility by approximately 0.15 years annually. Failure to adjust for mortality improvement implies the percent of the population eligible to receive full Social Security benefits and Medicare will increase substantially relative to the share eligible under a policy of age adjustment.

Keywords: Social Security; inflation; Medicare; Individual Reditrement Accounts (search for similar items in EconPapers)
JEL-codes: H51 H55 J11 J14 (search for similar items in EconPapers)
Date: 2008-08
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Citations: View citations in EconPapers (9)

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Related works:
Chapter: Adjusting Government Policies for Age Inflation (2010)
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