The Missing Piece in Policy Analysis: Social Security Reform

  title={The Missing Piece in Policy Analysis: Social Security Reform},
  author={Martin S. Feldstein},
  journal={Retirement Planning eJournal},
  • M. Feldstein
  • Published 1 January 1996
  • Economics
  • Retirement Planning eJournal
This lecture discusses the economic losses that result from an unfunded social security retirement system and the potential gain from shifting to a funded system. The social security payroll tax distorts labor supply and the form in which compensation is paid. Although each individual's benefits are linked to that individual's previous payroll tax payments, the low equilibrium rate of return inherent in an unfunded system implies a `net' payroll tax that causes distortions. The resulting… 
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