Live Long And Prosper - Paul Krugman

[WillyT]

Live Long And Prosper
Paul Krugman - NYT
August 13, 2010, 2:36 pm

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Live Long And Prosper

But actually it’s the other way around. And the fact that, to a growing extent, the less prosperous don’t live as long has important implications.

You see, the buzz increasingly suggests that the catfood deficit commission will call for a rise in the age at which people can collect full Social Security — justified by rising life expectancy.

This is a really terrible idea, for at least three reasons.

1. The retirement age has already been increased to 66, and is scheduled to rise to 67. So any further increase would mean pushing retirement back to unprecedented ages. Yes, a lot of people live to 70; how many of them are really able, easily, to work that late into life?

2. While life expectancy is rising, life expectancy at age 65 — which is what is relevant here — isn’t rising nearly as fast.

3. Finally, disparities in life expectancy have been rising sharply, with much smaller gains for disadvantaged socioeconomic groups and/or those with less education than the average. Yet these are precisely the people who depend most on Social Security.

Here’s a chart from the CBO documenting points 2 and 3:



The point is that raising the retirement age sounds reasonable to well-educated, highly-paid people, who can expect a long, rich life after 65. But they’re not the people who need Social Security in the first place.

Update: It turns out that the good people at EPI got there well ahead of me. They point us to this study by the Social Security Administration, which shows (Table 4) that men in the bottom half of the earnings distribution saw their life expectancy at age 65 rise only 1.1 years from 1982 to 2006. Over the same period, by the way, the retirement age — under current law — rose 8 months.

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Link: http://krugman.blogs.nytimes.com/2010/08/13/live-long-and-prosper-2/

:shrug: