Tuesday, November 19, 2013

Income Redistribution

This paper considers how Social Security’s many benefit and tax features have redistributed income across groups over time.

Using Current Population Survey data from 1970 through 1994 and micro-simulation projections from the Urban Institute’s DYNASIM3 model, research found that for many decades, Social Security redistributed from African-Americans, Hispanics, and other people of color, to whites.

And these transfers will likely to continue in future decades, as findings suggest that future reforms that place the burden of Social Security reform solely on younger, more diverse generations may have undesired distributional consequences if the aim of the program is to provide greater relative protections to more vulnerable groups.