Life-Cycle Welfare Costs of Social Security

Richard Burkhauser and John A. Turner
Additional contact information
John A. Turner: U.S. Department of Labor

Public Finance Review, 1981, vol. 9, issue 2, 123-142

Abstract: One-period models predict that a substantial welfare gain would result from removing the social security earnings test. In this article, we show that such models overestimate the size of potential gains. If one uses instead a two-period model, which captures intertemporal effects, the net result of removing the earnings test is ambiguous. In the presence of a personal income tax, workers who reduce their labor supply in the first period create a welfare loss which must also be considered. We use a present value model to estimate the change in lifetime welfare. We find that the net potential gain from removing the earnings test is probably small, especially when compared to the alternative of an increased personal income tax.

Date: 1981
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114218100900201 (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:9:y:1981:i:2:p:123-142

DOI: 10.1177/109114218100900201

Access Statistics for this article

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