المؤلفون: David, Martin, Menchik, Paul L.

المصدر: Economica; Nov85, Vol. 52 Issue 208, p421-434, 14p, 3 Charts

مصطلحات موضوعية: SOCIAL security, WEALTH, INHERITANCE & succession, INCOME, INCOME tax

مصطلحات جغرافية: WISCONSIN

مستخلص: This paper is an empirical study of the effects of social security on lifetime wealth accumulation and bequests. Using a sample of Wisconsin males, we have matched lifetime earnings records from income tax returns with their social security account records and their bequests obtained from probate court records. Since the cohort of males was born between 1890 and 1899, they represent a cohort that saw a great change in the size and coverage by occupation of the system. Hence, there is substantial within-cohort variation in social security wealth from which effects can be estimated.
For nearly 30 years, the life-cycle theory of savings has enjoyed an enormous amount of academic support. In the no-bequest variant, individuals save with the sole intention of consuming their savings in later years. The economy-wide stock of capital can therefore be generated by this pattern without any reliance on bequests (Modigliani, 1966). Such a model will lead to rather strong predictions about the effect of a pay-as-you-go public pension, hereafter "social security", on private savings. As Feldstein (1974) points out, social security should displace private savings, as well as reduce macro-saving, since the program is unfunded. This result follows from the assumption that each household will consume all of its assets during its own lifetime. [ABSTRACT FROM AUTHOR]

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