Social security and income distribution: Mortality and equity in pension plans.

摘要

This dissertation has two major objectives: to develop a simple methodology applicable to different Social Security systems in order to assess the distributive effect they have and the effect mortality differentials have on them, and to apply this methodology in an evaluation of the U.S. Social Security system. The first goal is accomplished by developing a two-stage method. First, we estimate adult mortality differentials, using a logistic analysis. Then, based on those estimates, we assess their effects on the Social Security scheme. A simple reliable survey of economic characteristics of the population, together with a small longitudinal data set to estimate mortality differentials (or, if not available, a reasonable set of assumptions) are necessary to apply the method to any society.; The second goal, an assessment of the distributive role of the U.S. Social Security system, is accomplished by applying the methodology mentioned previously. We find it is possible to dissagregate the distributive effect into three separate elements: the effect of the benefit formula, as defined by the Social Security Administration, the effect of mortality differentials and the effect of family and survivors' benefits. The first effect is due to the distributive policy of the government, and its results are clear: it distributes from men to women, from non-blacks to blacks, from highly educated to non-educated, and from the rich to the poor. With the exception of the first dimension (male-female), mortality differentials act in the opposite direction, compensating in some cases (as in the race dimension), reversing the distributive direction in others (as in the educational attainment dimension) or simply reducing the previous flow (as in the income dimension). Finally, the family and survivors' benefits effect has the opposite direction and, in most cases, cancels out the mortality differentials effect previously observed. This is mostly because high mortality groups, which receive smaller retirement benefits, also receive larger survivors' benefits. Combining the three effects, we find that the Old Age and Survivors Insurance scheme of Social Security has an active role in distributing income among social groups. Among them, women and large families benefit the most.