Unbiased Analysis of Today's Healthcare Issues
Over the past two decades, the share of total Social Security spending accounted for by Social Security Disability Insurance (DI) has increased from 10 percent in the 1970s to 17 percent today. In 2005, cash payment to DI beneficiaries topped $85 billion. Authors David Autor and Mark Duggan try to explain this phenomenon in their…
Recently I came across a paper by John Williamson describing a Notional Defined Contribution Model as a replacement for state pension system. Countries who have adapted the Notional Defined Contribution (NDC) model include Sweden (1994), Italy (1995), Latvia (1996), the Kyrgyz Republic (1997), Poland (1999), and Mongolia (2000). The model is in essence a pay-as-you-go…
The future of Social Security is in question. Even Federal Reserve chairman Ben Bernanke warns of the rapidly approaching Social Security “fiscal crisis.”. Individuals at the beginning or middle of their prime working years are unsure of how large (or small) their Social Security benefits will be when they retire. An NBER working paper by…
One Social Security reform often suggested is to change the indexation of benefits from a wage inflation measure to a price inflation measure, such as the Consumer Price Index (CPI). Critics argue that the price of healthcare has increased more than overall CPI and since the elderly spend a higher percentage of their income on…
Throughout the past week, I have spoke of the work disincentives many social security programs create. The question is: how do we measure these disincentives. The economics literature has given three different metrics to measure implicit social security wealth a retiree has and I will discuss each in turn. Accrual The accrual method measures how much…
The public pension system in the United Kingdom differs significantly from its peers in continental Europe. First, private and occupational pensions play a much larger role in retirement than in the rest of Europe. Secondly, UK projects that public pension savings will actually decrease as a percentage of GDP (from 4.5% in 2000 to 4.1%…
For the average Spaniard, going into retirement means collecting a public pension and nothing else. In 1990 less than 5% of the employed population had a private pension; while this figure has risen to 30% in 1999, still less than 1% of the population derives more than 10% of their retirement consumption needs from private…
While France, Germany and Italy struggle to reform their gigantic old-age pension system, in the Netherlands the problems are not nearly as acute. The Dutch have a Social Security system, but it is not as large as in the countries to its south. A large portion of the a Dutch individual’s pension comes from their employer;…
Japan is an incredible success story. After so much suffering in World War II, this country now has the second largest economy in the world and the longest life expectancy of any country in the OECD. This success however, may become a fiscal nightmare in the future. In 1998, 16.2% of the Japanese population was…
Like the French, Germans retire early (on average at between age 59 and 60) and for Germans, this early retirement is seen as a social achievement. Some polls, however, show that younger Germans do not believe they will receive an adequate pension in their old age and attempts at reform are underway. The Germans have had…