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Dallas Fed examines demographic effects on Social Security

For immediate release: December 11, 2002

DALLAS—In the latest issue of Economic and Financial Policy Review, Federal Reserve Bank of Dallas senior economist and policy advisor Alan D. Viard provides an economic analysis of how demographic developments affect the rate of return workers receive from the Social Security system.

In "Pay-As-You-Go Social Security and the Aging of America: An Economic Analysis," Viard examines three demographic developments: the low birthrate since the baby boom ended in 1965, the impending retirement of the baby boomers and the downward trend in old-age mortality. The low post-1965 birthrate reduces returns; the boomers' retirement simply marks the end of the high returns previously caused by the boom. Policy responses to the downward mortality trend are likely to increase returns for earlier generations and reduce them for later generations.


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James Hoard
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