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Social Security and the increasing longevity gap
Author(s) -
Sheshinski Eytan,
Caliendo Frank N.
Publication year - 2021
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12477
Subject(s) - life expectancy , social security , solvency , economics , longevity , welfare , simple (philosophy) , expectancy theory , social welfare , public economics , macroeconomics , political science , sociology , market economy , population , philosophy , genetics , demography , management , epistemology , biology , market liquidity , law
Growth in overall life expectancy is straining the Social Security budget, and the gap in life expectancy between the rich and poor is widening. Motivated by these facts, this paper does four things. First, we develop a simple way to summarize the degree of progressivity in a Social Security system. Second, we show that growth in the life expectancy gap over the last few decades unwinds three‐quarters of the progressivity of the Social Security system. Third, we develop simple reforms to Social Security that maintain the progressivity of the system and restore fiscal solvency. Fourth, we estimate the welfare effects of these potential reforms.