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Abstract All observers agree that Social Security reform is needed to restore the program’s solvency. This paper examines the impact of alternative reforms on Social Security finances, on the wider U.S. economy, and on workers who contribute to and receive benefits from the program. In one reform we consider, Social Security benefits are eventually reduced…
Abstract This paper provides a new examination of the adequacy of households’ saving for retirement. We develop a stochastic, life-cycle simulation model in which people save both for retirement and as a precaution against uncertain future earnings and uncertain lifespan. The model shows that, even among observationally-equivalent households, there will be a distribution of optima…
