The economic future of the social security system

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Virginia Polytechnic Institute and State University


This study addresses the problem of assessing the economic future of the Social Security System using a representative sample of the United States Population. The characteristics of the people defined in this sample include age, sex, race, marital status, monthly salary, status under Social Security and the age and number of any dependents.

The problem formulation deals with probabilistic events which may occur to an individual and will affect his status under Social Security. These events include marriage, divorce, death, birth of a child, retirement and disability onset and recovery.

Each month, it is seen which events occur and the resulting benefits paid by the system is calculated. The difference between the intakes and outlays of the system are calculated and the resulting trust fund found.

Using actual data from the Social Security Administration and the Bureau of the Census, the future of the system is evaluated by four representative case studies. The cases studied determine the effect on the system of changes in the birth rate and disability rate.