TY  - JOUR
AU  - Biggs,Andrew G.
AU  - Brown,Jeffrey R.
AU  - Springstead,Glenn
TI  - Alternative Methods of Price Indexing Social Security: Implications for Benefits and System Financing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11406
PY  - 2005
Y2  - June 2005
UR  - http://www.nber.org/papers/w11406
L1  - http://www.nber.org/papers/w11406.pdf
N1  - Author contact info:
Andrew Biggs
E-Mail: andrew.biggs@aei.org

Jeffrey Brown
Department of Finance
University of Illinois at Urbana-Champaign
515 East Gregory Drive
Champaign, IL 61820
Tel: 217/333-3322
E-Mail: brownjr@illinois.edu

Glenn Springstead
AB  - This paper explains four methods of "price indexing" initial Social Security retirement benefits, and discusses the effect of each method on the fiscal sustainability of Social Security, benefit levels and replacement rates, redistribution, and sensitivity of system finances to demographic and economic shocks. Of these methods, PIA Factor Indexing would generate the largest cost savings while reducing benefit growth at approximately an equal rate for all income levels. Methods that index the AIME, the formula "bend points," or both, would reduce benefit growth at a slower rate and would have different effects on benefit distribution and system sustainability.
ER  -