Social security and private saving: theory and historical evidence

Area of Science:

• Economics
• Public Policy

Background:

• Debate on social security's impact on private savings.
• Focus on U.S. social security system's economic effects.

Observation:

• Assessment of economist Martin Feldstein's evidence.
• Presentation of alternative historical data.
• Evaluation of contradictory evidence.

Findings:

• Currently available historical data do not support the proposition that social security reduces private saving.
• The total body of evidence remains inconclusive.

Implications:

• Historical evidence does not support the hypothesis that social security has reduced private saving.
• Findings are relevant to public policy considerations regarding social security and economic behavior.