Research & Analysis by John A. Turner
This study examines workers' expectations about their future Social Security benefits. The authors compile and analyze results of more than 60 individual surveys covering 1971 through 2020, with more than 130,000 respondents in total. The authors compare results over time and by demographic group to examine how Social Security expectations vary. They investigate possible explanations for the variations they find as well as for the finding that workers' expectations tend to be more pessimistic than Social Security actuarial projections.
This paper examines the effect of inflation on private pension saving. The role that private pensions can or should play in providing income in old age in the current inflationary environment is an important policy issue. A number of studies have discussed the effect of inflation on pensions. This study extends the existing analysis and presents the first empirical estimates. Inflation is seen to have a large negative effect on this aspect of retirement saving by workers.
One-period models predict that a substantial welfare gain would result from removing the Social Security earnings test. In this paper 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 that 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 with the alternative of an increased personal income tax.