Eighty years ago today, President Franklin D. Roosevelt signed the Social Security Act into law. Four and a half years later—after the German invasion of Poland but still two years before Pearl Harbor propelled the United States into war—65-year-old Ida May Fuller received the first Social Security check
for $22.54. She would live to be 100 years old.
Is it possible that SSDI has a noticeable impact on labor force participation, a measure that includes unemployed workers actively looking for work? It might, but as will be detailed in this blog post, there are more likely explanations for the relative decline in labor force participation in the United States compared to Europe, including more supportive labor market policies in Europe.
(This is the third of six blog posts on disability.)
In two earlier blog posts, I look at evidence compiled in Senate testimony by Stanford economist Mark Duggan arguing that financial incentives are driving a growth in disability rolls.
Are disability benefits becoming more generous? The average benefit awarded is roughly a third of the average wage, a ratio that has remained essentially unchanged since 1985. And as Harvard economist Jeffrey Liebman points out
, rising inequality and other factors have reduced the value of disability benefits relative to productivity per worker.
A closer look at the evidence shows that SSDI benefits have become, if anything, less generous. Moreover, even research cited by critics shows SSDI receipt has a negligible impact on work effort because few applicants, including marginal applicants who were denied benefits, are able to earn a living afterward.
I testified last week in Harrisburg on a 410-page public pension “reform” bill (SB1) that neither I nor my fellow witnesses had read.
This week marks the 50th anniversary of Head Start, a Great Society program that despite spotty funding has brightened the lives of millions of preschoolers.
As I noted in earlier blog posts, Andrew Biggs of the American Enterprise Institute and retired Towers Watson executive Sylvester Schieber have been leading a chorus of retirement crisis deniers, based in large part on the claim that income surveys don’t count lump-sum distributions from retirement accounts.
The Great Recession sparked a debate over the use of traditional defined-benefit (DB) pensions in states and municipalities across the United States.
The White House finally weighed in on the new House rule preventing a simple fix to extend the life of Social Security’s Disability Insurance (DI) trust fund.
In Monday’s Wall Street Journal, Andrew Biggs and Sylvester Schieber cited these statistics from the Organisation for Economic Co-operation and Development (OECD):
“Despite a supposedly stingy Social Security program and ineffective retirement-savings vehicles, the average U.S.
The recent release of the Federal Reserve’s triennial Survey of Consumer Finances has many retirement researchers scratching their heads. As expected, GenXers’ savings (shaded blue lines in Figure 1) benefited from the rebound in stock prices and the economic recovery.
In honor of Social Security’s 79th birthday, here’s an update to a 2011 blog post refuting Social Security myths spread by critics of the program.
The big news in the Social Security and Medicare trustees reports released this afternoon is the improvement in Medicare’s finances due to slowing health cost inflation.
The release of the Social Security Trustees Report, just announced for July 28, usually prompts alarmist commentary on the burdens of supporting an aging population.
In the past several years, fears that underfunded public pensions are a growing burden on taxpayers have led to calls to cut employer-provided pension benefits through increased employee contributions, increased retirement ages, reduced cost-of-living adjustments (COLAs), or other changes.
Memorial Day traditionally marks the start of summer fun and travel—for those who can afford it. Those who can’t include hotel housekeepers, who like many U.S.
I was saddened to learn that Harry Clay Ballantyne, who led the Office of the Actuary at the Social Security Administration, recently passed away.
The tentative deal reached between Detroit Emergency Manager Kevyn Orr and the Detroit pension funds has been characterized in the New York Times and other news reports as a victory for workers and retirees.
In honor of Equal Pay Day, my colleagues Heidi Shierholz and Hilary Wething suggest a number of ways to close the pay gap between men and women, including raising the minimum wage, enacting mandatory paid leave, helping workers unionize, shoring up employment law enforcement, enacting immigration reform, and passing the Paycheck Fairness Act.
After getting into hot water for criticizing Sen. Elizabeth Warren for wanting to expand Social Security, self-styled centrist Democrats Jonathan Cowan and Jim Kessler of Third Way are testing the retirement waters again by proposing, in a New York Times op-ed, to expand savings in IRAs.
Monique Morrissey, an economist at the Economic Policy Institute, testified before the U.S. Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy
How has the financial structure of Americans’ retirement evolved over the past fifty years?
In a Wall Street Journal op-ed last month, Sylvester Schieber and Andrew Biggs said that census data failed to capture much of the income Americans derive from 401(k) and IRA plans.
At the National Academy of Social Insurance conference earlier this month, keynote speaker Michael Lind of the New America Foundation called for reducing tax subsidies for 401(k)s and other employer-based plans to help pay for expanded Social Security benefits, a view I share.
The aftermath of the Great Recession has led to outright wage declines for the vast majority of American workers in recent years, resulting in a full decade of essentially stagnant wages.
Details of the president’s new retirement plan emerged today, and it’s nothing to get excited about. On the bright side, it’s refreshing to see a focus on investment risk, since many 401(k) participants invest too aggressively based on the mistaken belief that cumulative returns average out over time, while risk-averse people may be put off from saving altogether.
Pension funds benefit from economies of scale, expertise, risk pooling and long time horizons.
The American Benefits Council, the American Council of Life Insurers, and the Investment Company Institute released a study this week entitled (no joke): Our Strong Retirement System: An American Success Story (pdf).
The shift from traditional defined-benefit pensions to 401(k) plans over the past two decades has left the vast majority of Americans unprepared for retirement.