The Connection between Wage Growth and Social Security's Financial Condition; Policy Analysis, No. 607
Washington DC: Cato Institute, 2007. Presumed First Edition, First printing. Wraps. 16 pages. Includes Executive Summary, Introduction, The Relevant Dimensions of "Economic Growth," The Conventional View, The Impact of Wage Growth on Social Security's Fiscal Imbalance, Wage Growth and Social Security's Imbalance: Measurement for the United States. Although faster wage growth increases each future year's applicable cash-balance ratio, it also increases the shares of annual payrolls that accrue in the distant future. Those who appear to principally support the pay-as-you-go policy approach to fixing Social Security's financial problems tend to emphasize annual balance ratios as their preferred measure of the program's financial condition. Jagadeesh Gokhale is recognized internationally as an expert on entitlement reform, labor productivity and compensation, U.S. fiscal policy and the impact of fiscal policy on future generations. The author has worked with Cato’s Project on Social Security Choice to develop reforms for programs such as Social Security and Medicare. Gokhale served in 2002 consultant to the U.S. Department of Treasury and in 2003 as a visiting scholar with the American Enterprise Institute (AEI). He was the senior economic adviser to the Federal Reserve Bank of Cleveland from 1990 to 2003.
Gokhale has published papers in such top tier economics journals as the American Economic Review, Journal of Economic Perspectives, Quarterly Journal of Economics, Review of Economics and Statistics, and in publications of the National Bureau of Economic Research and the Federal Reserve Bank of Cleveland. Gokhale’s book, Fiscal and Generational Imbalances: New Budget Measures for New Budget Priorities, coauthored with Kent Smetters, drew widespread attention when it was published by AEI in 2003. His recent analysis of European economies’ fiscal condition attracted considerable media attention with the increase in sovereign default risk among Eurozone nations. Gokhale’s most recent book Social Security: A Fresh Look at Policy Alternatives, published by the University of Chicago Press (2010), challenges received notions about that program’s financial future and explores the implications of alternative reforms for the program as a whole and for today’s and future generations of Americans. Gokhale holds a Ph.D. in economics from Boston University and has been a member of the Social Security Advisory Board.
Under calibrations consistent with U.S. demographic and economic conditions, faster wage growth worsens Social Security's financial condition when it is measured comprehensively. This result contradicts that obtained under traditional measures of Social Security's financial status---such as annual balance ratios, truncated actuarial deficits, crossover dates, and trust fund-exhaustion dates. Condition: Very good.
Keywords: Wage Growth, Social Security, Economic Growth, Fiscal Imbalance, Worker-to-Retiree Ratio, Worker-to-Beneficiary Ratio
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Price: $30.00