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Risk Aspects of Investment-Based Social Security Reform - Chicago Scholarship Online
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Risk Aspects of Investment-Based Social Security Reform

John Y. Campbell and Martin Feldstein


The United States' current social security system operates on a pay-as-you-go basis; benefits are paid almost entirely out of current revenues. As the ratio of retirees to taxpayers increases, concern about the high costs of providing benefits in a pay-as-you-go system has led economists to explore other options. One involves “prefunding,” in which a person's withholdings are invested in financial instruments, such as stocks and bonds, the eventual returns from which would fund his or her retirement. The risks such a system would introduce — such as the volatility in the market prices of inves ... More

Keywords: social security system, benefits, risks, taxpayers, prefunding, withholdings, financial instruments, stocks, bonds, retirement

Bibliographic Information

Print publication date: 2000 Print ISBN-13: 9780226092553
Published to Chicago Scholarship Online: February 2013 DOI:10.7208/chicago/9780226092560.001.0001


Affiliations are at time of print publication.

John Y. Campbell, editor

Martin Feldstein, editor

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