00:00:00
let's start I guess with the backstory
00:00:02
on looking at this these aspects uh of
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wealth inequality tied to Social
00:00:07
Security uh right so as you mentioned
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when people think of retirement a big
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part of it is social security actually
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for most American most of their income
00:00:18
during the retirement period does not
00:00:20
come from the stock of wealth that they
00:00:22
have at the beginning but comes from the
00:00:24
Social Security benefits that they that
00:00:26
they that they receive now uh all those
00:00:30
promises that the government make they
00:00:31
have a value so you could think of it
00:00:33
like if you were to go on the private
00:00:35
Market you could buy an annity and that
00:00:38
annity would basically offer exactly the
00:00:40
same type of terms as Social Security it
00:00:43
would like provide a monthly payment
00:00:45
until the end of your life so there is a
00:00:47
market value for what the government
00:00:50
provides and so one question is once you
00:00:53
try to uh value those benefits the ones
00:00:57
that you have already acred because you
00:00:59
have contributed into the system what's
00:01:02
the value of this how does it change the
00:01:05
level of inequality that we see today
00:01:07
and does it change also the trends in
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wealth inequality because when we look
00:01:12
at wealth excluding Social Security we
00:01:14
see a steady increase in wealth
00:01:16
inequality since more or less the mid
00:01:19
1980s but what we find in our paper is
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that once you factor in Social Security
00:01:25
this positive trend in wealth inequality
00:01:28
basically uh disappear so when you think
00:01:30
about value for Social Security how has
00:01:34
that changed over the last several
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decades so it has changed enormously and
00:01:38
this has implication both for households
00:01:40
but also for the government because of
00:01:42
course what's uh we consider as an asset
00:01:45
for households is going to be a
00:01:46
liability for the government but we are
00:01:49
talking about I think right now
00:01:51
something that is close to 50 trillion
00:01:53
doar where like the total stock of
00:01:55
wealth excluding Social Security in the
00:01:57
US would be slightly more than 100
00:01:59
trillion so you have like 13 of the
00:02:02
total that is Social Security and which
00:02:04
was not considered in inequality
00:02:07
statistics before and so when you talk
00:02:09
about the different income brackets
00:02:12
there's probably much more of a Reliance
00:02:14
on Social Security as a component of
00:02:16
support in your retirement years for
00:02:19
lower income families than it is for
00:02:21
higher income families exactly so in
00:02:23
general As you move up in the income
00:02:25
distribution people receive higher
00:02:27
benefits yeah but that slope that Rel
00:02:29
relationship is much less pronounced
00:02:32
than if you look at wealth in
00:02:34
general and because there is much less
00:02:37
inequality in Social Security benefits
00:02:40
adding it to the to the to to the bucket
00:02:43
of the things that you consider as
00:02:45
wealth totally changes the picture that
00:02:47
you uh that you have when you trace the
00:02:50
level of inequality over time thank you
00:02:52
for listening to the ripple effect we
00:02:54
hope you found this episode informative
00:02:56
and engaging don't forget to subscribe
00:02:58
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00:03:00
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00:03:02
from the Wharton School
