Social security faces a major long-term funding crisis. A 38 or greater percentage increase in the system's tax rate is needed to meet benefit payments on an ongoing basis. Tax increases of this magnitude or comparable benefit cuts would significantly worsen social security's treatment of We thank Steven McKay for very helpful comments and Steven McKay and Tim Zayatz of Social Security's Office of the Actuary for critically important and extensive assistance in clarifying OASI benefit determination rules. We also thank Don Fullerton, James Poterba, and participants at the Spring 1998 NBER Public Economics conference for their reactions and advice. Laurence Kotlikoff and Steven Caidwell are grateful to Merrill Lynch & Co. for research support. The authors also thank Economic Security Planning, Inc. for permitting their use for this study of socslMa detailed OASI benefit calculator. All opinions expressed here are strictly those of the authors and are not necessarily those of the Federal
Neither the level of AFDC benefits nor the AFDC acceptance rate appear to serve as economic incentives to out-of-wedlock childbearing; nor does the availability of contraception and abortion seem to encourage teenagers to initiate sexual activity. However, the availability of subsidized family planning services does apparently lower pregnancy rates, especially among black teenagers; and the availability of abortion seems to reduce substantially the incidence of out-of-wedlock childbearing, especially among whites.
The aim of this paper is to outline a research agenda for the estimation of household wealth in the USA. The authors argue that, although much progress has been made with the estimation of household income, such research has concentrated on wage and benefit income. A dynamic microsimulation model called CORSIM is used to estimate new indicators of wealth. These include household income derived from stocks and shares, retirement accounts, and financial gains made from house sales and inheritances. New indicators of debts include all household debts, especially mortgage debts. Although these indicators have been calculated at national levels in the past, it is argued that considerable benefits will accrue to our understanding of social problems and changing consumer lifestyles if these indicators can be estimated at regional and subregional levels of resolution.
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