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Previous research generally concludes that early participants in the Social Security system received a very good 'deal'--better than later participants received, and much better than future participants are likely to get. However, researchers do not know the values of those deals and their distribution across individuals and groups largely because the necessary data have not been available. The study here uses the Social Security Administration's 1988 Continuous Work History Sample (CWHS) to calculate early participants' real internal rates of return to contributions. The study analyzes sex, race, household type, income, and birth cohorts and employs new Census Bureau mortality projects to forecast more accurately how life expectancies and benefit streams vary by race as well as by sex and birth cohort. Results contribute to an understanding of how the Social Security system redistributes income. All sample groups received high real rates of return. However, the returns varied widely by household type, income level, birth cohort, and other factors. The authors calculate that persons born from 1895 to 1922 received a total transfer of $3.5 trillion, of which $1.3 trillion remained to be paid as of 1988., I. INTRODUCTION The combined benefit and contribution structure of the U.S. Social Security program generates substantial income transfers within and across generations. A highly progressive benefit formula transfers income from [...]

Recently, a substantial amount of attention has been given to whether a cut in the capital gains tax rate would, in the long run, increase or decrease tax revenue (Gideon, [...]

This article comments on a paper by Matthew D. Shapiro and David W. Wilcox about mismeasurement in the Consumer Price Index (CPI). The paper is thought to be a particularly careful and thoughtful summary of the issues and state of knowledge concerning potential biases in the CPI. There is a valuable emphasis on the difficulty of some of the problems involved in eliminating those biases. The major limitation of the paper is that it gives too little attention to the basic question of why the authors are trying to quantify the CPI bias. It is believed that if more attention had been given to the purpose of measuring CPI bias, a different estimated distribution of total bias would have been obtained. The most important example of this point concerns social security. As the authors recognize, the indexation of federal taxes and spending is the most obvious reason that CPI mismeasurement matters, and social security is the most important component of that indexation. There is another issue that the authors address only in passing. The CPI is measured exclusive of numerous prices or quantities that would be included in a comprehensive cost-of-living index. These include such factors as crime levels and public-school quality that would point in the direction of a downward bias in the CPI as a measure of the true cost of living.

Provides a general description of projects and changes encompassed in major revision of Consumer Price Index (CPI). Context and history of CPI; Roles of the CPI; The 1998 revision of CPI.