Chapter

Adjusting Government Policies for Age Inflation

John B. Shoven and Gopi Shah Goda

in Demography and the Economy

Published by University of Chicago Press

Published in print January 2011 | ISBN: 9780226754727
Published online February 2013 | e-ISBN: 9780226754758 | DOI: http://dx.doi.org/10.7208/chicago/9780226754758.003.0005
Adjusting Government Policies for Age Inflation

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This chapter suggests that the concept of years since birth is a flawed way of measuring age and suggest four different ways of moving from nominal age (years since birth) to real age. It draws a parallel to the way that economic statistics and economic policies are often indexed for inflation and states in terms of real dollars. The four alternative ways that this chapter proposes to adjust nominal ages to arrive at real ages are based on remaining life expectancy, mortality risk, percent of life expectancy at birth completed, and percent of life expectancy at age twenty completed. This chapter looks at several key ages in important legislation and show how those ages would have changed if they had been stated in terms of real ages rather than nominal figures. The chapter also looks at how age indexation would differentially affect African Americans and Caucasians. The general result is that mortality improvement has been quite comparable for whites and blacks and therefore the appropriate age adjustments are about the same.

Keywords: government policies; eligibility ages; public programs; Social Security; Medicare; Individual Retirement Accounts; life expectancy; mortality risk; age inflation; age adjustments; demographic groups; mortality improvement; age indexation

Chapter.  10405 words.  Illustrated.

Subjects: Macroeconomics and Monetary Economics

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