TY  - JOUR
AU  - Feldstein,Martin
TI  - Structural Reform of Social Security
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11098
PY  - 2005
Y2  - February 2005
UR  - http://www.nber.org/papers/w11098
L1  - http://www.nber.org/papers/w11098.pdf
N1  - Author contact info:
Martin S. Feldstein
President Emeritus
NBER
1050 Massachusetts Avenue
Cambridge, MA  02138-5398
Tel: 617/868-3905
Fax: 617/868-7194
E-Mail: msfeldst@nber.org
AB  - Governments around the world have enacted or are currently  considering fundamental structural reforms of their Social Security pension programs.   The key feature in these reforms is a shift from a pure pay-as-you-go tax-financed system, in which taxes on current workers are primarily distributed to current retirees,  to a mixed system that combines pay-as-you-go benefits with investment-based personal retirement accounts. 
	This paper discusses how such a  mixed system could work in practice and how the transition to such a change could be achieved.  It then analyzes  the economic gains that would result from shifting to a mixed system.  I turn next to the three problems that critics raise about any investment-based plan: administrative costs,   risk, and income distribution.  Finally, I comment on some of the ad hoc proposals for dealing  with the financial problem of Social Security without shifting to an investment-based system.
ER  -