Journal of Political Economy Vol. 95 No. 3 1987
Should Social Security Benefits Be Means Tested?
Abstract
Social-security retirement benefits distort the saving decisions of workers who are rational enough to save for their future. Since the implicit rate of return in an unfunded social-security program is less than the marginal product of capital, the resulting decline in saving causes a welfare loss. The present paper examines the conditions under which the welfare loss can be reduced by replacing the current universal social-security program with a means-tested program that pays benefits only to those individuals with little or no other retirement income or assets.
- DOI
- 10.1086/261467
- Volume
- 95
- Issue
- 3
- Pages
- 468-484
- Language
- en
- Sources
- crossref openalex