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- Title
The Effect of Social Security on Personal Saving.
- Authors
Darby, Michael R.
- Abstract
The basic argument can be summarized quite simply. The social security program changes the life cycle shape of income in two ways: (1) Taxes reduce income during the earning years but benefits increase income during retirement years. (2) Social security encourages earlier retirement than would otherwise occur so that there are fewer earning years and more retirement years. The first shift tends to reduce saving during the earning years as the two incomes are less unequal. The second shift, however, tends to increase both the annual rate and total amount of saving during the earning years as a longer period of retirement must be provided for in a shorter working life. So the net effect on aggregate saving is ambiguous. The bulk of the book presents various attempts to empirically separate these offsetting effects.
- Subjects
EFFECT of Social Security on Personal Saving, The (Book); MUNNELL, Alicia Haydock, 1942-; SAVINGS; NONFICTION
- Publication
Journal of Finance (Wiley-Blackwell), 1976, Vol 31, Issue 1, p186
- ISSN
0022-1082
- Publication type
Book Review
- DOI
10.2307/2326420