The impact of social security on personal saving: Time series evidence

The purpose of this study was to test the hypothesis that the social security system has caused a change in personal saving. There are three views concerning social security and saving. The first is that social security has caused a decrease in saving since people may view taxes paid as a substitute for private saving. Another view is that social security has caused an increase in saving since the earnings test forces retirement at age 65, thus individuals have an extended retirement period to provide for. Finally, the idea that social security has caused no change in saving if regarded as a substitute for intergenerational transfers.;The results offer no evidence to support the hypothesis that social security has caused a change in saving. The two most accurate social security wealth variables were not significant, thus offering no support to the hypothesis that social security has caused a change in saving.