Call for more social science modeling for Social Security

An op-ed in the New York Times explains how poorly financial forecasts for Social Security are made and suggests social scientists can help:

Remarkably, since Social Security was created in 1935, the government’s forecasting methods have barely changed, even as a revolution in big data and statistics has transformed everything from baseball to retailing.

This omission can be explained by the fact that the Office of the Chief Actuary, the branch of the Social Security Administration that is responsible for the forecasts, is almost exclusively composed of, well, actuaries — without any serious representation of statisticians or social science methodologists. While these actuaries are highly responsible and careful and do excellent work curating and describing the data that go into the forecasts, their job is not to make statistical predictions. Yet the agency badly needs such expertise.

With considerable help from the actuaries and other officials at the Social Security Administration, we unearthed how the agency makes mortality forecasts and uses them to predict the program’s solvency. We learned that the methods are antiquated, subjective and needlessly complicated — and, as a result, are prone to error and to potential interference from political appointees. This may explain why the agency’s forecasts have, at times, changed significantly from year to year, even when there was little change in the underlying data.

We have made our methods, calculations and software available online at so that others can replicate or improve our forecasts. The implications of our findings go beyond social science. As the wave of retirement by the baby boomers continues, doing nothing to shore up Social Security’s solvency is irresponsible. If the amount of money coming in through payroll taxes does not increase and if the amount of money going out as benefits remains the same, the trust funds will become insolvent less than 20 years from now.

Sociologists seem to be looking for ways to get involved in major policy issues so perhaps this is one way to do that. It is also interesting to note this op-ed is based on a 2012 article in Demography titled “Statistical Security for Social Security.” Not too many articles can make such a claim…

Also, I’m sure this doesn’t inspire confidence among some for the government’s ability to keep track of all of its data. Does the federal government have the ability to hire and train the kind of people it needs? Can it compete with the private sector or political campaigns (think of what the lauded 2012 Obama campaign big data workers might be able to do)?

Different definitions for welfare

Apparently the gubernatorial race in Maine has included discussions about how welfare provided by the government might be defined differently:

“Essentially, we all get welfare in some fundamental form or another,” said Luisa Deprez, a sociology professor at the University of Maine.

Unemployment, Social Security, school lunches, subsidized college loans and even federal tax refunds can be considered forms of public assistance, according to those who favor a broader definition.

In the context of the gubernatorial campaign, however, welfare has been discussed in its more common, narrow definition: public anti-poverty programs that help provide basic needs, such as food and shelter.

I’ve other studies that suggest the public favors government intervention more when it is called something like “government assistance” as opposed to “welfare.”

This is a reminder that there are very few people who really want no government involvement in the lives of individuals. In reality, people who are supposedly at different ends of the political spectrum are debating how much government should be involved. How many people, of any political persuasion, are willing to completely give up unemployment benefits, Social Security, or Medicare?

A conundrum: Americans see entititlement programs as growing problem but don’t support available solutions

Gallup reports that a majority of Americans see entitlement programs, such as Social Security and Medicare, creating large financial problems for the country in 25 years. Yet, a poll from several months ago showed that Americans did not support some of the main options for helping the finances of Social Security developed by the Congressional Budget Office.

I always find this to be an interesting situation: people agree something should be done but the available options do not appeal to a majority. Looking for and then applying patterns from situations where  solutions are developed would seem to be worthwhile. Are there sociological studies that address this?

Whoever can find a way through this will be deserving of lots of credit. Complicating the issue is the generation gap: issues like Social Security and Medicare tend to fire up older voters, who vote in larger proportions already.

What to do with those extra years of life

Virginia Postrel addresses how American society can move beyond seeing age 65 or retirement as the end of a career or life (“Floridization”):

It’s to change the pictures in our heads, to give up the images that “Floridization” evokes, as either a warning or an implicit ideal. People do not automatically become crotchety, backward-looking, and idle when they reach their 60s.

But changing that picture means exchanging today’s architectural metaphor, “building a career,” for another one: adaptive reuse. This is the human-capital equivalent of turning industrial lofts into apartments, factories into medical schools, power plants into art museums, or saw mills into shopping centers. Your original career may be economically obsolete, or you may just want a change, but your knowledge and experience still have their charms. Instead of equating success with a steady progression of better-paying jobs, each related to the previous one, this model emphasizes taking on new challenges and making new contributions, even if that means going back to school, taking a pay cut, or starting as a trainee when you’re middle-aged.

One version of this idea is the “encore career” advocated by Marc Freedman, who has made one of the most prominent attempts to think what how longer, healthier lives should mean for Americans’ careers.

This is an important topic to be discussing with longer life spans, limited funds for government retirement programs, and economic times that may require citizens to work to an older age. Those with more years have plenty to contribute to society and to simply write them off as past their time is foolish: it is not good for these individuals, their families and communities, and society.

Implicit in this discussion is an American emphasis on youth. Postrel cites one journalist who seems to suggest that youth equals progress and that being older automatically leads to loneliness. This may only appear to be the case because our society doesn’t leave much productive space for those who have retired. As I recently discussed, being older can lead to increased happiness and wisdom, two traits out society could use.

h/t Instapundit