Long Run Effects of Social Security Reform Proposals on Lifetime Progressivity

61 Pages Posted: 29 Mar 2000 Last revised: 17 Oct 2010

See all articles by Julia Lynn Coronado

Julia Lynn Coronado

Federal Reserve Board - Division of Research and Statistics

Don Fullerton

University of Illinois at Urbana-Champaign - Department of Finance; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute)

Thomas Glass

Glass & Company, CPAs

Date Written: February 2000

Abstract

This paper uses a lifetime framework to address questions about the progressivity of social security and proposed reforms. We use a large sample of diverse individuals from the PSID to calculate lifetime income, to classify individuals into income quintiles, and then to calculate the present value of taxes minus benefits for each person in each group. In our basic calculations, the current system is slightly progressive, overall, on a lifetime basis. Social Security would become slightly more progressive in one of the reform plans, and it would become slightly regressive in each of the other plans. The pattern of progressivity is affected by alternative assumptions, but it is affected in similar ways for the current system and proposed reforms. None of these reforms greatly alters the current degree of progressivity on a lifetime basis.

Suggested Citation

Coronado, Julia Lynn and Fullerton, Don and Glass, Thomas W., Long Run Effects of Social Security Reform Proposals on Lifetime Progressivity (February 2000). NBER Working Paper No. w7568. Available at SSRN: https://ssrn.com/abstract=216813

Julia Lynn Coronado (Contact Author)

Federal Reserve Board - Division of Research and Statistics ( email )

Washington, DC 20551
United States
202-452-3044 (Phone)
202-872-4927 (Fax)

Don Fullerton

University of Illinois at Urbana-Champaign - Department of Finance ( email )

1206 South Sixth Street
Champaign, IL 61820
United States
(217) 244-3621 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Thomas W. Glass

Glass & Company, CPAs ( email )

500 W 5th St
Suite 1210
Austin, TX 78701
United States

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