Addressing Social Security’s Solvency While Promoting High Labor Force Participation

Published: 2018
Project ID: UM18-10


A number of proposals and options to address OASI trust-fund solvency have been suggested in recent years. The present work attempts to examine a subset of commonalities from these proposals from the standpoint of economic efficiency — that is, from the perspective of their effect on household and societal well-being. Conversely, we also attempt to study the possible implications for OASI solvency of age-targeted, payroll-tax changes that were originally designed to enhance efficiency. In the end, we argue that solvency and efficiency should be joint considerations for policy. And, we show that efficiency and labor force participation rates — the latter often themselves a topic of public concern — tend to be closely related.


John Laitner