EconPapers    
Economics at your fingertips  
 

Managing A Bulge: Policy Options for Social Security

Kenneth Lewis and Laurence Seidman

Public Finance Review, 2004, vol. 32, issue 4, 382-403

Abstract: The authors analyze several reasonable policy options for pay-as-you-go Social Security that might be adopted in response to a temporary demographic bulge. The bulge generation enters the economy, works, retires, andexits the economy. Three of the policies maintain a balanced budget. Under the fourth policy, Social Security managers take advantage of the working bulge by initially keeping the replacement rate and tax rate fixed and accumulatinga fund. Then the replacement rate and tax rate are adjusted so that the fund accumulates while the bulge works and then is drawn down to zero as the bulge goes through retirement. This fund accumulation policy would not be adopted by a legislature responding to self-interested adults. Nevertheless, the fund accumulation policy should appeal to a benevolent social planner or citizen because it is the only policy that avoids imposing a nontrivial loss on any cohort in any stage of its life.

Keywords: Tax rate; replacement rate; pay-as-you-go Social Security; life cycle growth model; demographic bulge (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/1091142103261675 (text/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: https://EconPapers.repec.org/RePEc:sae:pubfin:v:32:y:2004:i:4:p:382-403

DOI: 10.1177/1091142103261675

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().

 
Page updated 2025-03-31
Handle: RePEc:sae:pubfin:v:32:y:2004:i:4:p:382-403