Providing Guarantees in Social Security
The purpose of this study is to determine how wage indexing of Social Security benefits interacts with proposals to increase national saving. Economic models predict that if saving increases, the returns to that saving would accrue to both labor and capital. If labor received some of the return, the Social Security benefit promises increases with the rise in economy–wide wages. No study to date has adequately taken into account the impact of this wage indexing.
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