Fertility Response to the Tax Treatment of Children

One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm, and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis with an additional 20 years of data. We find that their results suffer from the spurious regression problem, and are not robust to differencing. We find evidence of a statistically significant fertility response to a change in the real value of child tax subsidies occurring with a one- to two-year lag, but a much smaller and statistically insignificant total effect after several years, suggesting that a change in the child tax subsidy most strongly affects the timing of births.fertility, income taxation, child tax benefits, personal exemption

Removing the Disincentives for Long Careers in the Social Security and Medicare Benefit Structure

When Social Security was instituted in 1935, the period life expectancy at age 20 for males was 66 and for females 69. Today, 20-year-old males have a period life expectancy of 76 and females, 80. This increase in life expectancy has been accompanied by a corresponding improvement in health at all ages. Cutler, Liebman, and Smyth (2005) find that, in terms of mortality, men at age 68 in 2000 have roughly the same mortality risk as men at age 62 in 1960. Thus, at a same age, men in the year 2000 are roughly six years younger. In terms of self assessed health status, they find that the difference is even larger, approximately ten years. Their bottom line is, “Our best guess is that people aged 62 in the 1960s are in equivalent health to people aged 70 or more today.” In related work, Shoven (2004) suggested that the age of elderly people is more appropriately measured by remaining life expectancy than by years since birth. In his most recent work, Shoven (2007) introduces the concept of “real ages” in contrast to “nominal ages” with real ages depending on mortality risk rather than years since birth.Social Security, Real Age, life expectancy

Differential Mortality by Income and Social Security Progressivity

There is a widespread belief that people with low lifetime labor income have higher age specific mortality and lower remaining life expectancies at age 60 or 65 than those with middle or high lifetime earnings. In this paper, we assess the implications of differential mortality by lifetime income for Social Security progressivity. Social Security has a highly progressive formula to determine monthly benefits in that those with low lifetime earnings get a much higher replacement rate than those with high lifetime earnings. However, recent studies on the mortality gap by lifetime income suggest that at least some of this progressivity is counterbalanced by the longer average lifetimes experienced by higher lifetime income recipients of Social Security. To reassess the progressivity of Social Security, we calculate internal rates of return and net present values for the program under assumptions of differential mortality and compare these measures of progressivity to the same measures calculated assuming all individuals experience average population mortality rates. Under the assumption of constant mortality across lifetime income subgroups, the Social Security system is progressive regardless of the measure shown. However, a good deal of the progressivity is undone or even reversed when differential mortality is taken into account.Social Security, Mortality Gap, Differential Mortality, Lifetime Income

Social Security and the Timing of Divorce

The Social Security system contains many features designed to provide an adequate retirement income for familes, rather than just individual retired workers. The most important of these features is the spousal benefit, under which secondary earners are entitled to receive a monthly payment of 50 percent of their spouse's monthly Social Security benefit. However, shifts in family structure since the creation of the Social Security program have led to criticisms of the spousal benefit on equity grounds. Using the Panel Study of Income Dynamics (PSID) Marital History File, this paper focuses on one specific implication: Social Security's divorce rules. We find that vulnerable couples are more likely to delay divorce in order to recieve spousal benefits, however the difference is small and statistically insignificant.Social Security, divorce, spousal benefit

A Tax on Work for the Elderly: Medicare as a Secondary Payer

Medicare as a Secondary Payer (MSP) legislation requires employer-sponsored health insurance to be a primary payer for Medicare-eligible workers at firms with 20 or more employees. While the legislation was developed to better target Medicare services to individuals without access to employer-sponsored insurance, MSP creates a significant implicit tax on working beyond age 65. This implicit tax is approximately 15-20 percent at age 65 and increases to 45-70 percent by age 80. Eliminating this implicit tax by making Medicare a primary payer for all Medicare-eligible individuals could significantly increase lifetime labor supply due to the high labor supply elasticities of older workers. The extra income tax receipts from such a policy would likely offset a large percentage of the estimated costs of making Medicare a primary payer.

DEVELOPMENT OF CARBON TETRACHLORIDE-INDUCED CHRONIC HEPATOTOXICITY MODEL IN RATS AND ITS APPLICATION IN EVALUATION OF HEPATOPROTECTIVE ACTIVITY OF SILYMARIN

Objective: The objective of the present work is to develop carbon tetrachloride (CCl4)-induced chronic hepatotoxicity model in rats and its applicationin evaluation of hepatoprotective activity of silymarin.Methods: Animals were divided into four groups. Three groups were the disease induction group and 4th was the treatment group. In disease inductiongroups, chronic liver injury was induced by administration of CCl4 through intraperitoneal route (1 ml/kg) for 7-8 weeks. For treatment Group, 1 mlsilymarin suspension (orally) and CCl4 was given for 7-8 weeks. During disease induction and treatment period (7-8 weeks), blood samples werecollected and serum was separated which in turn used to analyze liver function tests such as serum glutamate oxaloacetate transaminase (SGOT),serum glutamate pyruvate transaminase (SGPT), alkaline phosphate (ALP), direct bilirubin, total protein (TP), and albumin (Alb) levels. Along withliver functional tests, tests to check cholesterol, glucose, and malondialdehyde (MDA) were also performed. Liver fibrosis and cirrhosis was quantifiedby histopathological studies of small portion of the excised liver. Model was validated by repetition of the experiment. Intermediate dissection wascarried out to measure an extent of liver damage.Result: Serum SGOT, SGPT, ALP, and direct bilirubin were found to be significantly higher in CCl4 intoxicated rats. TP and Alb were decreased, andMDA was found to be significantly higher in CCl4 intoxicated rats, which is the main end product of lipid peroxidation. Whereas in the treatment groupsilymarin improved the liver functions in CCl4 toxicated drug.Conclusion: We conclude that protein oxidation may play a role in the pathogenesis of CCl4 induced liver injury. The accumulation of oxidized proteinsmay be an early indication of CCl4 induced liver damage and silymarin found to be effective in liver injury by inhibiting protein oxidation

Fertility and the Personal Exemption: Comment

One of the most commonly cited studies on the effect of child subsidies on fertility, Whittington, Alm and Peters (1990), claimed a large positive effect of child tax benefits on fertility using time series methods. We revisit this question in light of recent increases in child tax benefits by replicating this earlier study and extending the analysis. We do not find strong evidence to justify the model specification from the original paper. Moreover, even if the original specfication is appropriate, we show that the Whittington et al. results are not robust to more general measures of child tax benefits. While we do not find evidence that child tax benefits affect the level of fertility, we find some evidence of a short-run fertility response that occurs with a two-year lag.

How Well Are Social Security Recipients Protected from Inflation?

Social Security is widely believed to protect its recipients from inflation because benefits are indexed to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, the CPI-W may not accurately reflect the experience of retirees for two reasons. First, retirees generally have higher medical expenses than workers, and medical costs, in recent years, have tended to rise faster than the prices of other goods. Second, even if medical costs did not rise faster than the prices of other goods, as retirees aged, their medical spending would still tend to increase as a share of income; that is, each cohort of retirees would still see a decline in the real income available for non-medical spending. We show that, for the 1918 birth cohort, Social Security benefits net of average out-of-pocket medical expenses have declined relative to a price index for non-medical goods by around 20 percent for men, and by around 27 percent for women. We explore alternative options for indexing Social Security benefits and discuss the impact of these alternatives on Social Security’s long-term finances.