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              SOCIAL  SCIENCE  RESEARCH  NETWORK

   EMPLOYEE BENEFITS, COMPENSATION & PENSION LAW ABSTRACTS
             Sponsored by Pension Governance, LLC
              Vol. 8, No. 32: September 20, 2007

Editor:     PAMELA J. PERUN
              Policy Director, Aspen Institute - Initiative on
              Financial Security
              PAMELA@PLANETNOW.COM
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                     Topic of This Issue:
                       Social Security
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T A B L E    O F    C O N T E N T S

"Making America Work: Alfred P. Murrah Professorship Inaugural
 Lecture"
    JONATHAN BARRY FORMAN
        University of Oklahoma College of Law

"How Have People Responded to Changes in the Retirement Earnings
 Test in 2000?"
    JAE SONG
        U.S. Social Security Administration
    JOYCE MANCHESTER
        U.S. Social Security Administration

"Issues Facing State and Local Government Pensions"
    RICK MATTOON
        Federal Reserve Bank of Chicago

"Riding the Third Rail: The Politics of Social Security Reform in
 the Retrenchment Era"
    MARC L. GOLDWEIN
        National Academy of Social Insurance, Johns Hopkins
        University, New America Foundation

"Uncovering the American Dream: Inequality and Mobility in Social
 Security Earnings Data Since 1937"
    WOJCIECH KOPCZUK
        Columbia University - Department of Economics, Columbia
        University - School of International & Public Affairs,
        National Bureau of Economic Research (NBER)
    EMMANUEL SAEZ
        University of California, Berkeley - Department of
        Economics, National Bureau of Economic Research (NBER)

"Social Security Benefits as a Retirement Resource for U.S.
 Near-Retirees"
    ENJAMIN RIDGES
        Affiliation Unknown
    HARMILA HOUDHURY
        Affiliation Unknown

"What Explains Trends in Labor Force Participation of Older Men
 in the United States?"
    DAVID M. BLAU
        University of North Carolina at Chapel Hill - Department
        of Economics, Institute for the Study of Labor (IZA)
    RYAN GOODSTEIN
        University of North Carolina at Chapel Hill

"Social Security and the Timing of Divorce"
    GOPI SHAH GODA
        Affiliation Unknown
    JOHN B. SHOVEN
        Stanford University - Department of Economics, National
        Bureau of Economic Research (NBER)
    SITA N. SLAVOV
        Occidental College - Department of Economics

"Counting the Ways: The Structure of Federal Spending"
    HOWELL E. JACKSON
        Harvard Law School
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"Making America Work: Alfred P. Murrah Professorship Inaugural
 Lecture"
    Oklahoma Law Review, Vol. 60, 2007


 Contact:  JONATHAN BARRY FORMAN
             University of Oklahoma College of Law
   Email:  JFORMAN@OU.EDU
Auth-Page:  http://ssrn.com/author=250316

Full Text:  http://ssrn.com/abstract=991947

ABSTRACT: Work. Hard work! And plenty of it. That is what has
made the United States into the world's foremost economic
superpower. But while we Americans value and respect work, we are
also concerned about economic justice. We like to see all workers
earn a fair day's pay for a fair day's work. And we like having a
safety net to catch those who cannot compete successfully in our
labor markets. America works because of this balance between the
desire to reward work and our concerns about economic justice.
But America could work even better.

This article explains how current government policies influence
work and work behavior and makes the case for changing government
tax, welfare, Social Security, pension, and labor market policies
to encourage work and promote greater economic justice. It is a
clear, provocative declaration of principles and a bold
prescription for policies that restore and preserve the balance
of work rewards and economic justice.
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"How Have People Responded to Changes in the Retirement Earnings
 Test in 2000?"
    Social Security Bulletin, Vol. 67, No. 1, pp. 1-15, 2007


 Contact:  JAE SONG
             U.S. Social Security Administration
   Email:  jae.song@ssa.gov
Auth-Page:  http://ssrn.com/author=81600

Co-Author:  JOYCE MANCHESTER
             U.S. Social Security Administration
   Email:  joyce.manchester@ssa.gov
Auth-Page:  http://ssrn.com/author=526246

Full Text:  http://ssrn.com/abstract=1010351

ABSTRACT: In 2000 Congress passed legislation to remove the
retirement earnings test for persons at the full retirement age
and older. This article explores how individuals affected by the
removal of the earnings test have changed their participation in
the workforce and the amount they earn. It also looks at changes
in the age at which individuals claim their Social Security
retirement benefits. All results are based on longitudinal data
from the Social Security Administration that cover the 4 years
before and after the change.
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"Issues Facing State and Local Government Pensions"
    Economic Perspectives, Vol. 31, No. 3, 2007


 Contact:  RICK MATTOON
             Federal Reserve Bank of Chicago
   Email:  rick.mattoon@chi.frb.org
Auth-Page:  http://ssrn.com/author=339866

Full Text:  http://ssrn.com/abstract=1012418

ABSTRACT: In the U.S., there are nearly 14 million state and
local government workers and six million retirees who are owed
more than $2.3 trillion dollars in eventual pension payouts by
more than 2,000 different governments. The author discusses the
current condition of state and local pension plans, as well as
the strategies that are being used to help meet pension
obligations.
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"Riding the Third Rail: The Politics of Social Security Reform in
 the Retrenchment Era"

 Contact:  MARC L. GOLDWEIN
             National Academy of Social Insurance, Johns Hopkins
             University, New America Foundation
   Email:  marc@goldwein.net
Auth-Page:  http://ssrn.com/author=853274

Full Text:  http://ssrn.com/abstract=1007811

ABSTRACT: In the early 1980s, an aide to Democratic House Speaker
Thomas ?Tip? O'Neill declared Social Security to be the ?Third
Rail of American Politics.? Like the electrified rail used to
power the trains of the Washington, D.C. Metro, anyone who
touched Social Security would face likely (political) death. At
the time, this aide was referencing President Ronald Reagan's
failed attempt to reform Social Security in 1981. Yet a
quarter-century later the adage still seems to apply.

Upon his 2004 electoral victory, President George W. Bush
declared that he had ?earned capital in the campaign, political
capital, and now intend[ed] to spend it.? ?Reforming Social
Security,? Bush explained, ?will be a priority of my
administration.?

But despite early favorable polls, a massive publicity campaign,
Republican majorities in both houses, and strong ideological
commitment to reform, President Bush failed to meet his goal.
Over the course of 2005, public support for President Bush's plan
(as well as for Bush himself) eroded considerably, and no Social
Security bill even made it out of committee, let alone to the
President's desk.

Bush supporters and privatization advocates were clearly
disappointed with the President's failure to reform Social
Security; however it is my assessment that they should not have
been surprised. In fact, Presidents Ford, Carter, Reagan, and
Clinton have each seen some of their own reform efforts fail to
materialize; and since 1935, there have only been two instances
in which a reform involving any level of 'pain' was successful.

Riding the Third Rail: The Politics of Social Security Reform in
the Retrenchment Era will attempt to analyze Bush's inability to
reform Social Security in a broader historical context. The paper
will explore similar reform attempts that began under President
Gerald Ford, after it became clear that the over-expansion of the
U.S. Social Security system had stretched its obligations further
than any anticipated revenue. More specifically, I will analyze
the roles that elected politicians and issue network members have
played in determining both the direction and success of reform
attempts.

After establishing a historical framework, I will offer a
detailed analysis of the recent push to retrench Social Security
under President Bush. I will also comment on what I believe to be
the prospects for future reform in light of Social Security's
history and the current political climate surrounding it.

Ultimately, I intend to demonstrate that the nature of Social
Security politics is competitive, dynamic, and complex, and that
this complexity generally impedes good policy proposals from both
sides of the political spectrum.
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"Uncovering the American Dream: Inequality and Mobility in Social
 Security Earnings Data Since 1937"
    NBER Working Paper No. W13345


 Contact:  WOJCIECH KOPCZUK
             Columbia University - Department of Economics,
             Columbia University - School of International &
             Public Affairs, National Bureau of Economic
             Research (NBER)
   Email:  wk2110@columbia.edu
Auth-Page:  http://ssrn.com/author=243670

Co-Author:  EMMANUEL SAEZ
             University of California, Berkeley - Department of
             Economics, National Bureau of Economic Research
             (NBER)
   Email:  saez@econ.berkeley.edu
Auth-Page:  http://ssrn.com/author=195356

Full Text:  http://ssrn.com/abstract=1009795

ABSTRACT: This paper uses Social Security Administration
longitudinal earnings micro data since 1937 to analyze the
evolution of inequality and mobility in the United States.
Earnings inequality follows a U-shape pattern, decreasing sharply
up to 1953 and increasing steadily afterwards. We find that
short-term and long-term (rank based) mobility among all workers
has been quite stable since 1950 (after a temporary surge during
World War II). Therefore, the pattern of annual earnings
inequality is very close to the pattern of inequality of longer
term earnings. Mobility at the top has also been very stable and
has not mitigated the dramatic increase in annual earnings
concentration since the 1970s. However, the stability in
long-term earnings mobility among all workers masks substantial
heterogeneity across demographic groups. The decrease in the
gender earnings gap and the substantial increase in upward
mobility over a career for women is the driving force behind the
relative stability of overall mobility measures which mask
declines in mobility among men. In contrast, overall inequality
and mobility patterns are not significantly influenced by the
changing size and structure of immigration nor by changes in the
black/white earnings gaps.
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"Social Security Benefits as a Retirement Resource for U.S.
 Near-Retirees"
    Review of Income and Wealth, Vol. 53, Issue 3, pp. 538-567,
    September 2007


 Contact:  ENJAMIN RIDGES
             Affiliation Unknown
Auth-Page:  http://ssrn.com/author=858787

Co-Author:  HARMILA HOUDHURY
             Affiliation Unknown
Auth-Page:  http://ssrn.com/author=858788

Full Text:  http://ssrn.com/abstract=1010785

ABSTRACT: This paper analyzes Social Security benefits as a
retirement resource (wealth and income) for U.S. near-retirees.
We look at how the average values of several measures of benefits
such as Social Security wealth and earnings replacement rates
have changed from earlier cohorts to today's near-retirement
cohort, examine differences among demographic and socioeconomic
groups within cohorts, and discuss reasons for these changes and
differences. We use improved data (actual earnings history data)
to produce more accurate measures of benefits. The paper also
uses some new benefit measures. Three key findings are: (1)
average real Social Security wealth increases markedly as we move
to later cohorts primarily because of increases in average real
lifetime earnings; (2) replacement rates fall as we move from the
cohorts of persons reaching 61 in 199397 to later cohorts
primarily because of the phase-in of increases in the age of
eligibility for full benefits and the increasing labor market
activity of women; and (3) median Social Security wealth is much
higher for women than for men because women live longer.
______________________________

"What Explains Trends in Labor Force Participation of Older Men
 in the United States?"
    IZA Discussion Paper No. 2991


 Contact:  DAVID M. BLAU
             University of North Carolina at Chapel Hill -
             Department of Economics, Institute for the Study of
             Labor (IZA)
   Email:  david_blau@unc.edu
Auth-Page:  http://ssrn.com/author=48959

Co-Author:  RYAN GOODSTEIN
             University of North Carolina at Chapel Hill
   Email:  ryan_goodstein@unc.edu
Auth-Page:  http://ssrn.com/author=861858

Full Text:  http://ssrn.com/abstract=1012545

ABSTRACT: After nearly a full century of decline, the Labor Force
Participation Rate (LFPR) of older men in the United States
leveled off in the 1980s, and began to increase in the late
1990s. We use a time series of cross sections from 1962 to 2005
to model the LFPR of men aged 55-69, with the aim of explaining
these trends. We investigate the effects of changes in Social
Security rules, lifetime earnings, pension coverage, wages,
health, health insurance, and the educational composition of the
labor force. Our results indicate that the decline in the LFPR
from the 1960s through the 1980s cannot be explained by any of
these factors. The recent increase in the LFPR of older men can
be explained by changes in the composition of the older male
population away from high school dropouts and toward college
attendees and graduates. Changes in Social Security may have
contributed to the recent increase as well, but the results for
Social Security are sensitive to specification.
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"Social Security and the Timing of Divorce"
    NBER Working Paper No. W13382


  Author:  GOPI SHAH GODA
             Affiliation Unknown
Auth-Page:  http://ssrn.com/author=862425

 Contact:  JOHN B. SHOVEN
             Stanford University - Department of Economics,
             National Bureau of Economic Research (NBER)
   Email:  shoven@stanford.edu
Auth-Page:  http://ssrn.com/author=15712

Co-Author:  SITA N. SLAVOV
             Occidental College - Department of Economics
   Email:  sslavov@oxy.edu
Auth-Page:  http://ssrn.com/author=512659

Full Text:  http://ssrn.com/abstract=1012836

ABSTRACT: Social Security provides spousal benefits in retirement
to secondary workers in married couples based on the primary
worker's earnings record. In addition, Social Security pays
spousal benefits to divorced secondary workers whose marriages
lasted at least ten years. However, if a marriage failed in less
than ten years, no spousal benefits are paid. The spousal benefit
is particularly valuable to secondary workers in couples where
there is a large disparity in earnings between the primary worker
and the secondary worker. We examine whether these couples, who
have more to gain from extending their marriage to ten years, are
more likely to delay marriage to the tenth year relative to a
control group. We find that vulnerable couples are slightly more
likely to delay divorce from year nine to year ten; however, the
effect is statistically insignificant and small in magnitude.
While the "cliff"-vesting of retirement benefits for divorced
spouses raises equity concerns, it does not appear to distort
incentives for divorce.
______________________________

"Counting the Ways: The Structure of Federal Spending"
    Harvard Law and Economics Discussion Paper No. 583


 Contact:  HOWELL E. JACKSON
             Harvard Law School
   Email:  HJACKSON@LAW.HARVARD.EDU
Auth-Page:  http://ssrn.com/author=52344

Full Text:  http://ssrn.com/abstract=985201

ABSTRACT: Public discussion of federal fiscal policy typically
focuses on several familiar metrics of performance, including the
total deficit, the level of public debt and percentage of federal
spending committed to mandatory spending and net interest
payments. While useful, these measures are based on accounting
conventions developed years ago, and do not capture many of the
ways in which the federal government now commits public
resources, including obligated budget authority, guarantees
associated with various government insurance programs, retirement
benefits for federal workers and military personnel, and - most
substantially - federal social insurance programs such as Social
Security and Medicare. Collectively these programs and activities
represent substantial and largely overlooked current commitments
of future federal resources. After reviewing current measures of
fiscal performance, the article presents several alternative ways
to quantify federal financial performance over the first half of
this decade utilizing more comprehensive measures of mounting
federal financial obligations. So, for example, while the
commonly reported total deficit of the federal government in
FY2005 was $318 billion, a more comprehensive measure of fiscal
results over the course of the same year would have shown a
deterioration in the country's net financial position in excess
of $3.3 trillion - that is, an order of magnitude larger. To
promote more informed debate and encourage more responsible
public leadership, the more comprehensive measures of fiscal
performance described in this article should be adopted as the
primary metrics for reporting the financial performance of the
federal government. (US, Canada).
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