Social Security and Saving: New Time Series Evidence

21 Pages Posted: 10 Jul 2000

See all articles by Martin S. Feldstein

Martin S. Feldstein

National Bureau of Economic Research (NBER) (deceased); Harvard University (deceased)

Date Written: March 1995

Abstract

This paper reexamines the results of my 1974 paper on Social Security and saving with the help of an additional twenty-one years of data. The estimates presented here reconfirm that each dollar of Social Security wealth (SSW) reduces private saving by between two and three cents. The parameter estimates for the postwar period and for the entire sample since 1930 are very similar. The correction of the error in the original SSW series between 1958 and 1971 therefore does not significantly affect the original results. The estimated effect of SSW is robust with respect to the addition of a variety of variables that have been suggested in previous critiques of the original study. In the aggregate, the parameter values imply that the Social Security program currently reduces overall private saving by nearly 60 percent.

Suggested Citation

Feldstein, Martin S., Social Security and Saving: New Time Series Evidence (March 1995). NBER Working Paper No. w5054, Available at SSRN: https://ssrn.com/abstract=225833

Martin S. Feldstein (Contact Author)

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Harvard University (deceased)

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