Social Security in Theory and Practice (II): Efficiency Theories, Narrative Theories, and Implications for Reform

166 countries have some kind of public old age pension. What economic forces create and sustain old age Social Security as a public program? Mulligan and Sala-i-Martin (1999b) document several of the internationally and historically common features of social security programs, and explore "political" theories of Social Security. This paper discusses the "efficiency theories", which view creation of the SS program as a full of partial solution to some market failure. Efficiency explanations of social security include the "SS as welfare for the elderly" the "retirement increases productivity to optimally manage human capital externalities", "optimal retirement insurance", the "prodigal father problem", the "misguided Keynesian", the "optimal longevity insurance", the "government economizing transaction costs", and the "return on human capital investment". We also analyze four "narrative" theories of social security: the "chain letter theory", the "lump of labor theory", the "monopoly capitalism theory", and the "Sub-but-Nearly-Optimal policy response to private pensions theory". The political and efficiency explanations are compared with the international and historical facts and used to derive implications for replacing the typical pay-as-you-go system with a forced savings plan. Most of the explanations suggest that forced savings does not increase welfare, and may decrease it.

The Labor Market Effects of Technology Shocks

We analyze the labor market effects of neutral and investment-specific technology shocks along the intensive margin (hours worked) and the extensive margin (unemployment). We characterize the dynamic response of unemployment in terms of the job separation and the job finding rate. Labor market adjustments occur along the extensive margin in response to neutral shocks, along the intensive margin in response to investment specific shocks. The job separation rate accounts for a major portion of the impact response of unemployment. Neutral shocks prompt a contemporaneous increase in unemployment because of a sharp rise in the separation rate. This is prolonged by a persistent fall in the job finding rate. Investment specific shocks rise employment and hours worked. Neutral shocks explain a substantial portion of the volatility of unemployment and output; investment specific shocks mainly explain hours worked volatility. This suggests that neutral progress is consistent with Schumpeterian creative destruction, while investment-specific progress operates as in a neoclassical growth model.

Academic Building Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Dormitory and Dining Services Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Hilton Coliseum Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Recreational Facility Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statement and Supplementary Information, June 30, 2006

State University Audit Report

Student Health Facility Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statement and Supplementary Information, June 30, 2006

State University Audit Report

Utility System Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Telecommunications Facilities Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Parking System Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Reports, Basic Financial Statements and Supplemental Information, June 30, 2006

State University Audit Report

Ice Arena Facility Revenue Note Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Information and Supplementary Information, June 30, 2006

State University Audit Report

Indoor Multipurpose Use and Training Facility Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statements and Supplementary Information, June 30, 2006

State University Audit Report

Regulated Materials Facility Revenue Bond Funds, Iowa State University of Science and Technology, Independent Auditor's Report, Basic Financial Statement and Supplementary Information, June 30, 2006

State University Audit Report

Poor, Hungry and Stupid: Numeracy and the Impact of High Food Prices in Industrializing Britain, 1780-1850

This paper argues that low levels of nutrition impaired cognitive development in industrializing England, and that welfare transfers mitigated the adverse effects of high food prices. Age heaping is used as an indicator of numeracy, as derived from census data. For the cohorts from 1780-1850, we analyse the effect of high grain prices during the Napoleonic Wars. We show that numeracy declined markedly for those born during the war years, especially when wheat was dear. Crucially, where the Old Poor Law provided for generous relief payments, the adverse impact of high prices for foodstuffs was mitigated. Finally, we show some tentative evidence that Englishmen born in areas with low income support selected into occupations with lower cognitive requirements.