assignment4

Assignment4 - Economics 313 Assignment 4 Fall 2007 Read thoroughly Chapter 11 in Rosen and Gayer Then turn to the section on Long-term stresses and

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Economics 313 Assignment 4 Fall 2007 Read thoroughly Chapter 11 in Rosen and Gayer. Then turn to the section on Long-term stresses and reform (pp. 248-255) of social security. 1. Briefly explain the sources of the long-term stresses on Social Security. The sources of the long-term stresses on Social Security are the dependency ratio and replacement ratio. The dependency ratio is the ratio of the number of beneficiaries to the number of workers. As the ratio goes up, there are fewer workers to support a growing number of beneficiaries, which places stress on the system. This ratio will increase in the near future because the baby-boom generation is approaching retirement age and will be eligible for benefits soon. The replacement ratio is the ratio of average benefits to average covered wages. If this ratio remains constant, particularly as the baby-boom generation enters retirement, the Social Security system will be further stressed in terms of balancing how much of a beneficiary’s
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This note was uploaded on 04/14/2008 for the course ECON 313 taught by Professor White during the Fall '07 term at Bucknell.

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Assignment4 - Economics 313 Assignment 4 Fall 2007 Read thoroughly Chapter 11 in Rosen and Gayer Then turn to the section on Long-term stresses and

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