Lifetime Earnings Patterns, the Distribution of Future Social Security Benefits, and the Impact of Pension Reform

Lifetime Earnings Patterns, the Distribution of Future Social Security Benefits, and the Impact of Pension Reform

Abstract

This paper describes an analysis of career earnings patterns developed for predicting the impact of Social Security reform. We produce estimates of age-earnings profiles of American men and women born between 1931 and 1960, obtained from Social Security earnings records. We forecast future individual earnings and estimate the shape and prevalence of nine stylized earnings patterns of U.S. workers. This approach is better than the traditional approach of examining a small number of representative workers who are assumed to have steady earnings throughout their careers, because few workers have level career earnings.

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