Working Paper: NBER ID: w0477
Authors: Martin Feldstein
Abstract: This paper uses a new and particularly well-suited body of data to assess the impact of social security retirement benefits on private savings. The Retirement History Survey combines survey evidence on the wealth of couples in their early sixties with detailed information from the administrative records of the Social Security Administration on the lifetime earnings of those individuals and the social security benefits to which they are entitled. The present paper uses these data to estimate a model of the determination of preretirement net worth. On balance, the estimates developed in this study favor the extended life cycle model as a theory of asset accumulation and indicate a substantial substitution of social security wealth for private wealth accumulation.
Keywords: Social Security; Wealth Accumulation; Life Cycle Model
JEL Codes: H55; D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Social Security Wealth (H55) | Private Savings (D14) |
| Social Security Benefits (H55) | Earlier Retirement (J26) |
| Social Security Benefits (H55) | Liquidity of Social Security Wealth (H55) |
| Social Security Wealth (H55) | Substitution Effect (D11) |
| Social Security Benefits (H55) | Private Wealth Accumulation (G51) |