This book explores how the current system and alternative reforms would impact a variety of groups, particularly those groups who now depend on Social Security to avoid poverty in old age. There are vital gaps in the protection provided to the existing elderly despite the important current spending of the Social Security program. The existing system is not nearly as redistributive as the benefit formula would imply. Continuing the current pure pay-as-you-go (PAYGO) system would mean a 7.0 percentage point increase in the current 12.4 percent payroll tax rate. Moreover, an investment-based system would raise the amount of capital per worker in the economy, increasing real wages and, to a lesser extent, depressing the real rate of return on capital. An overview of the chapters included in this book is given. The studies stress the significance of focusing on the distributional aspects of reform plans.
Keywords: Social Security, reforms, current system, pay-as-you-go, economy, real wages, capital