Research and Analysis by Lawrence H. Thompson
The Advantages and Disadvantages of Different Social Welfare Strategies
from Social Security Bulletin, Vol. 57 No. 3 (released July 1994)
Wage Averaging Rules and the Distribution of Social Security Benefits
(released March 1976)
This paper analyzes four aspects of the Social Security benefit computation—the indexing of wage histories prior to computing average indexed monthly earnings, the number of years over which wages are averaged, the particular years of wages that are eligible for inclusion in the average, and the method of adjusting for length of service in the paid labor force. It reports how particular groups of retirees—men and women, blacks and whites, high-wage and low-wage—would fare under alternative benefit computation schemes.
