This paper examines five problems with the indexing procedures used by the Social Security Administration of the United States in taking inflation into account when calculating Old Age and Survivor Insurance (OASI) Benefits. Because of the commin-gling of unindexed with indexed earnings, a...

Feldstein [1985] posed the questions of what would be the optimal level of retirement benefit, and what would be the optimal mix between the pay-as-you-go system and the funded pension system under the assumption of an exogenous interest rate. We reconsider the problem with the addition of a...

We study the welfare effects of earnings testing flat-rate old-age benefits in a quantitative overlapping generations model with idiosyncratic labor income risk. In our model economy, even a moderate earnings testing reduces individuals' expected lifetime utility. Moreover, it also lowers the...