Tue Mar 15 18:12:33 EST 2005
Inspired by Prof. Williamson's plea, I have a few related questions
which may or may not be easy for some other list members to answer, and
which may or may not inspire some useful discussion.
Looking through the Roosevelt administration's speeches and publications
about social security during the mid-thirties, it's clear that among the
main public justifications set forth by the administration for old age
insurance was that it would help alleviate unemployment and free up jobs
for younger workers by providing an incentive for older workers to
retire. (Additionally, many seem to have been of the opinion that this
would enhance productivity, because younger workers were more energetic,
or something like that.)
My questions are:
(1) What if any is the evidence that the advent of Social Security
reduced the average age of the labor force? (Was FDR right?)
(2) Is there (as I assume) a good theoretical basis for asserting that
Social Security lessens the labor supply by incentivizing retirement?
(Was FDR right?)
(3) If so, what, if any, is the likely hit on the productivity of the
economy by pulling older workers out the workforce?
(4) In our less manufacturing based and more information-centric
economy, is there any reason to believe that older workers, having
gained more experience and human capital, are worth MORE in terms of
productivity than younger workers?
(5) More generally, are there diminishing productivity returns to labor
as workers age? If so, at what age does productivity generally peak? And
should the age of eligibility for benefits ideally take this into
account?
I'm pleased to receive answers to any or all of these question on or off
list. Or corrections of false assumptions. And a citation is as good as
an answer. Thanks!
Will Wilkinson
wwilkinson at cato.org