Discrimination and Economic Mobility

Reviews current research on primarily racial discrimination to assess the extent to which it persists and contributes to relative immobility for minorities, especially African Americans. Discusses methods of measuring discrimination and their limitations

The Implications of Career Lengths for Social Security

While growing fiscal pressures and increasing life expectancy have prompted calls to raiseretirement ages so that lifetime benefits would be concentrated in older ages, some fear that this change -- without other adjustments -- might harm long-career, lower-wage workers. Tying retirement benefit eligibility to years of service might protect lower-wage workers if they tend to start their careers relatively early and work more years prior to retirement than higher-wage workers. But higher disability rates and greater employment volatility could offset lower-wage workers' early labor force starts, and lead to fewer total years of service completed. Using survey data matched to administrative earnings records, we describe variation in work histories for current and near retirees by gender, education, and other important characteristics. We find that years of service are not likely to provide an effective way to protect the lowest-wage workers. Among other reasons, men and women with the least education also work the least

How Would the President's Fiscal Commission's Social Security Proposals Affect Future Beneficiaries?

Estimates how proposed changes to Social Security, including raising the cap on earnings subject to the payroll tax, would affect benefits over time and by income and lifetime payroll tax contributions

Are There Opportunities to Increase Social Security Progressivity Despite Underfunding?

Reviews the payroll tax, Social Security's benefit formula, and outcomes by race, gender, and earnings level, and explores why low-income and minority groups do not receive greater returns on contributions. Simulates the effects of progressive reforms

Boomers' Retirement Income Prospects

Examines how changing demographics and patterns in lifetime earnings, pension participation, and wealth accumulation among Americans born between 1946 and 1964 will shape baby boomers' economic well-being at age 70

The Prospects of the Baby Boomers: Methodological Challenges in Projecting the Lives of an Aging Cohort

In most industrialized countries, the work and family patterns of the baby boomers characterized by more heterogeneous working careers and less stable family lives set them apart from preceding cohorts. Thus, it is of crucial importance to understand how these different work and family lives are linked to the boomers' prospective material well-being as they retire. This paper presents a new and unique matching-based approach for the projection of the life courses of German baby boomers, called the LAW-Life Projection Model. Basis for the projection are data from 27 waves of the German Socio-Economic Panel linked with administrative pension records from the German Statutory Pension In-surance that cover lifecycle pension-relevant earnings. Unlike model-based micro simula-tions that age the data year by year our matching-based projection uses sequences from older birth cohorts to complete the life-courses of statistically similar baby boomers through to retirement. An advantage of this approach is to coherently project the work-life and family trajectories as well as lifecycle earnings. The authors present a benchmark anal-ysis to assess the validity and accuracy of the projection. For this purpose, they cut a signif-icant portion of already lived lives and test different combinations of matching algorithms and donor pool specifications to identify the combination that produces the best fit be-tween previously cut but observed and projected life-course information. Exploiting the advantages of the projected data, the authors compare the returns to education - measured in terms of pension entitlements - across cohorts. The results indicate that within cohorts, differences between individuals with low and high educational attainment increase over time for men and women in East and West Germany. East German boomer women with low educational attainment face the most substantial losses in pension entitlements that put them at a high risk of being poor as they retire

Rising Tides and Retirement: The Aggregate and Distributional Effects of Differential Wage Growth on Social Security

Recent growth in wage inequality has important implications for Social Security solvency and the distribution of benefits. Because only earnings below the taxable maximum are subject to Social Security payroll taxes, wage growth that is concentrated among very high earners will generate lower tax receipts than wage growth that is more evenly distributed. The progressivity of the Social Security benefit formula increases benefit payouts when the share of workers with low wages grows. This study uses a dynamic microsimulation model to examine the aggregate and distributional consequences of alternative scenarios about the distribution of future wage growth among workers. We find fairly marked changes in projected Social Security benefit distributions, poverty, and long-term financing status with relatively modest changes in assumptions about wage differentials.