_________________________________________________________________
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 6, No. 23: December 1, 2005
_________________________________________________________________
Publisher: Employment, Labor, Compensation & Pension Law Journals
a division of
Social Science Electronic Publishing, Inc. (SSEP)
and Social Science Research Network (SSRN)
Editor: PAMELA PERUN
Urban Institute
Mailto:pamela@planetnow.com
Copyright: SSEP, Inc. 2005. All rights reserved.
Leading Social Science Research Delivered To Your Desktop
http://www.SSRN.Com/
___________________________________________________________
Topic of This Issue:
Social Security
___________________________________________________________
SEARCHING THE SSRN ELECTRONIC LIBRARY
To search the entire SSRN eLibrary, please visit:
http://papers.ssrn.com/
To browse all abstracts published in this journal, please visit:
http://www.ssrn.com/link/benefits-compensation-pension-law.html
To ensure delivery of this journal, please add LSN@SSRN.com to
your email contact list.
REDISTRIBUTION
Individual and professional subscriptions to the journal are for
single users. It is a violation of copyright to redistribute
this document electronically or otherwise without the explicit
permission of Social Science Electronic Publishing, Inc.
Site licenses for organizations are available by contacting
Mailto:Site@SSRN.Com
SIGN OFF
SUBSCRIPTION MANAGEMENT
You can change your journal subscriptions by going to the SSRN
User HeadQuarters. Please enter the email address where you
received this email in the "Your Email Address" field and
click "Submit". Click on your name on the next screen, and your
User ID and Password will be emailed to you. Once you have
successfully logged in, you will be able to change your journal
subscriptions. If you have questions or problems with this
process, please email UserSupport@SSRN.com or call 877-SSRNHelp
(toll free 877.777.6435).
ALIGNMENT
If this document is misaligned, please set type face to a
non-proportional font such as Courier 10.
PAPER DOWNLOADS
If you need assistance downloading papers from our web site,
please contact Mailto:Support@SSRN.Com
T A B L E of C O N T E N T S
_________________________________________________________________
WORKING PAPERS
"Do the Elderly Respond to Taxes on Earnings? Evidence from the
Social Security Retirement Earnings Test"
DAVID LOUGHRAN
The RAND Corporation
STEPHEN J. HAIDER
Michigan State University
Department of Economics
"Reforming Public Pensions in the US and the UK"
PETER A. DIAMOND
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
"Household Saving Rates and the Design of Social Security
Programmes: Evidence from a Country Panel"
RICHARD F. DISNEY
University of Nottingham
Axia Economics
Institute for Fiscal Studies (IFS)
"Accounting for Social Security Benefits"
HOWELL EDMUNDS JACKSON
Harvard University
Harvard Law School
"The Social Security Trust Funds and Public Saving"
THOMAS L. HUNGERFORD
Congressional Research Service
"Early Retirement: Free Choice or Forced Decision?"
DAVID DORN
University of St. Gallen - Research Institute for
Labour Economics and Labour Law
ALFONSO SOUSA-POZA
University of St. Gallen
Department of Economics
"Social Security in United States Treaties and Executive
Agreements"
ALLISON CHRISTIANS
University of Wisconsin Law School
S S R N I N F O R M A T I O N
_________________________________________________________________
* Partners in Publishing
* Administrative Information
- Missing issues & change of address
- Solicitation of abstracts
* Directors
* Subscription to SSRN Journals
_________________________________________________________________
ACQUIRING PAPERS
Download papers directly from the included web address or contact
the author or other contact person directly. Provide an address
to which the author or other contact person can send a paper
copy and mention that you saw the abstract in SSRN. Some of
SSRN's Partners in Publishing require a subscription or charge a
fee for electronic downloads.
EDITORIAL POLICIES
To provide the broadest coverage of research in Employee
Benefits, Compensation & Pension Law we do not referee working
papers. We accept abstracts of working papers in Employee
Benefits, Compensation & Pension Law whose topics suit the
coverage of the journal and which are part of the worldwide
scholarly discourse.
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"Do the Elderly Respond to Taxes on Earnings? Evidence from the
Social Security Retirement Earnings Test"
BY: DAVID LOUGHRAN
The RAND Corporation
STEPHEN J. HAIDER
Michigan State University
Department of Economics
Paper ID: RAND Working Paper Series No. WR-223
Date: January 2005
Contact: DAVID LOUGHRAN
Email: Mailto:DAVID_LOUGHRAN@RAND.ORG
Postal: The RAND Corporation
P.O. Box 2138
1700 Main Street
Santa Monica, CA 90407-2138 UNITED STATES
Phone: 310-393-0411 x7257
Co-Auth: STEPHEN J. HAIDER
Email: Mailto:haider@msu.edu
Postal: Michigan State University
Department of Economics
East Lansing, MI 48824 UNITED STATES
ABSTRACT:
The effective tax on earnings embodied in the Social Security
retirement earnings test has been as high as 50 percent.
Surprisingly, among the numerous empirical studies that have
examined the earnings test, there is little agreement about
whether the earnings test affects elderly labor supply at all.
This paper examines new and reconsiders existing empirical
evidence on the earnings test and conclude that, at least for
men, the earnings test has a substantial impact on labor supply
and claiming behavior.
JEL Classification: E24, H20, H55, J14
______________________________
"Reforming Public Pensions in the US and the UK"
BY: PETER A. DIAMOND
Massachusetts Institute of Technology (MIT)
Department of Economics
National Bureau of Economic Research (NBER)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=777946
Paper ID: MIT Dept. of Economics Working Paper No. 05-19
Date: August 5, 2005
Contact: PETER A. DIAMOND
Email: Mailto:pdiamond@mit.edu
Postal: Massachusetts Institute of Technology (MIT)
Department of Economics
Room E52-344
50 Memorial Drive
Cambridge, MA 02142 UNITED STATES
Phone: 617-253-3363
Fax: 617-253-7804
ABSTRACT:
This essay describes the current debate on reforming Social
Security in the US, along with a brief description of how the
program works. Along the way it comments on the quality of some
proposed reform proposals as well as their political standing.
Where issues are similar, some inferences are drawn for the UK.
JEL Classification: H55
______________________________
"Household Saving Rates and the Design of Social Security
Programmes: Evidence from a Country Panel"
BY: RICHARD F. DISNEY
University of Nottingham
Axia Economics
Institute for Fiscal Studies (IFS)
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=831484
Paper ID: CESifo Working Paper Series No. 1541
Date: September 2005
Contact: RICHARD F. DISNEY
Email: Mailto:richard.disney@nottingham.ac.uk
Postal: University of Nottingham
School of Economics
University Park
Nottingham NG7 2RD, UNITED KINGDOM
Phone: +44 115 951 5620
Fax: +44 115 951 4159
ABSTRACT:
I argue that the offsetting effect of social security
contributions on household retirement saving depends on how
closely the social security programme imitates a private
retirement saving plan (i.e. the "actuarial" component of the
social security programme) - the closer the design of the
programme to a private retirement saving plan, the higher the
offset. I estimate the determinants of household saving rates in
a cross-country panel, augmenting standard measures of social
security programme generosity and cost by indicators that proxy
the actuarial component of the programme. These indicators
affect saving rates as predicted; moreover they also affect
labour force participation rates of older women (but not men).
The findings are consistent with the view that more
actuarially-based public programmes are treated by participants
as a mandatory saving programme rather than as a
tax-and-transfer system, thereby raising labour force
participation rates but also increasing the programme's
substitutability for private retirement saving.
JEL Classification: E21, G23, H24
______________________________
"Accounting for Social Security Benefits"
BY: HOWELL EDMUNDS JACKSON
Harvard University
Harvard Law School
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=839246
Paper ID: Harvard Law and Economics Discussion Paper No. 520
Date: August 2005
Contact: HOWELL EDMUNDS JACKSON
Email: Mailto:HJACKSON@LAW.HARVARD.EDU
Postal: Harvard University
Harvard Law School
Griswald 402
1563 Massachusetts Avenue
Cambridge, MA 02138 UNITED STATES
Phone: 617-495-5466
Fax: 617-495-5156
ABSTRACT:
Every year, the Social Security Administration mails Social
Security Statements to all eligible workers over the age of 25.
These Statements include estimates of monthly retirement and
other benefits that participants are projected to receive under
the Social Security Act. The Statements also summarize Social
Security Administration (SSA) records about participants'
earnings history, which determines benefit levels, and provide
various background information about the Social Security program
and its finances. For many Americans, the Social Security
Statement is the principal source of information about Social
Security benefits. This paper analyzes the content of the
current Social Security Statement. While the Social Security
Statements are useful tools for certain kinds of financial
planning and allow participants to check the accuracy of the
Administration's records of their earnings history, the
Statements may also lead participants to misinterpret the value
of their Social Security benefits and may make it difficult for
participants to compare Social Security benefits to other
sources of retirement savings. In addition, the current Social
Security Statements obscure the extent to which additional years
of labor market participation increase the value of Social
Security benefits. After reviewing the strengths and weakness of
the current structure of Social Security Statements, the chapter
then describes how these statements might be supplemented with
estimates of the actuarial value of Social Securities benefits
for individual participants. This supplemental information would
make it easier for participants to compare Social Security
benefits to other sources of retirement incomes, and would
highlight the manner in which participants' Social Security
benefits accrue over time thereby mitigating some of the labor
market inefficiencies associated with Social Security payroll
taxes. The chapter concludes with a review of several potential
drawbacks of supplementing Social Security Statements with
accrued values, including the possibility that this supplemental
information would make it more difficult to change Social
Security benefits in the future, the possibility that disclosing
the accrued value of Social Security benefits could lead some
workers to make offsetting reductions in other forms of
retirement savings, and the possibility that this supplemental
information might make the redistributive aspects of the Social
Security system more transparent, potentially weakening support
for the program among some constituencies.
JEL Classification: G11, G18, G23, G28, H55
______________________________
"The Social Security Trust Funds and Public Saving"
BY: THOMAS L. HUNGERFORD
Congressional Research Service
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=828593
Date: October 17, 2005
Contact: THOMAS L. HUNGERFORD
Email: Mailto:thunger@starpower.net
Postal: Congressional Research Service
Washington, DC 20540 UNITED STATES
ABSTRACT:
The Social Security program is one of the most popular and
successful government programs in the United States. At the end
of 2004, the OASDI trust funds held almost $1.7 trillion in
Federal government bonds and notes. It is projected that the
trust funds assets will be equivalent to over 20 percent of GDP
by 2020. Several recent studies have concluded that the
increases in the trust funds have been more than offset by
reductions in surpluses elsewhere in the federal budget.
Consequently, public saving has fallen as a result of the trust
fund build-up since the mid-1980s. This study reexamines this
issue and finds that the trust fund has had no impact on the
rest of the federal budget.
JEL Classification: E21, H55, H61
______________________________
"Early Retirement: Free Choice or Forced Decision?"
BY: DAVID DORN
University of St. Gallen - Research Institute for
Labour Economics and Labour Law
ALFONSO SOUSA-POZA
University of St. Gallen
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=831486
Paper ID: CESifo Working Paper Series No. 1542
Date: September 2005
Contact: DAVID DORN
Email: Mailto:David.Dorn@unisg.ch
Postal: University of St. Gallen - Research Institute for Labour
Economics and Labour Law
CH-9000 St. Gallen, SWITZERLAND
Co-Auth: ALFONSO SOUSA-POZA
Email: Mailto:alfonso.sousa-poza@unisg.ch
Postal: University of St. Gallen
Department of Economics
FAA-HSG
Guisanstr. 92
CH-9000 St. Gallen, SWITZERLAND
ABSTRACT:
Early retirement is usually explained as a supply-side
phenomenon. However, early retirement can also be a demand-side
phenomenon arising from a firm's profit maximization behavior.
This paper analyzes voluntary and involuntary early retirement
based on international microdata covering 19 industrialized
countries. The results indicate that generous early retirement
provisions of the social security system do not only make
voluntary early retirement more attractive for individuals, but
also induce firms to encourage more employees to retire early.
In particular, firms seem to use early retirement to reduce
staff during economic recessions and as a means to circumvent
employment protection legislation.
JEL Classification: J14, J21, J22, J26
______________________________
"Social Security in United States Treaties and Executive
Agreements"
BY: ALLISON CHRISTIANS
University of Wisconsin Law School
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=822504
Date: September 2005
Contact: ALLISON CHRISTIANS
Email: Mailto:achristians@wisc.edu
Postal: University of Wisconsin Law School
975 Bascom Mall
Madison, WI 53706 UNITED STATES
ABSTRACT:
The employee dispatched by her company to work temporarily in
international destinations is not a new phenomenon, but social
structures between which the worker may move have arguably never
been more complex. In a world of social insurance programs that
feature broad contribution requirements coupled with limitations
on benefits, global workers may be required to contribute in
multiple jurisdictions, yet be eligible for benefits in none.
Having introduced its own social insurance program in the 1930s
when workers were much less likely to be sent on temporary
cross-border assignments, the United States social security
system has had to adapt to the increasingly international
workforce. Adaptation has occurred over the last two decades in
the form of coordination of taxes and benefits through
treaty-like instruments called executive agreements. However,
some matters of social security taxation, like other tax
matters, have traditionally been addressed in income tax
treaties. This article examines the role of tax treaties and
executive agreements in the administration of the United States
social security program, discusses some of the conflicts and
issues that arise due to the use of multiple and potentially
conflicting instruments, and suggests ways in which
international coordination of social security could be improved
in the United States.