Empirical Evidence of the Influence of the Economy on the U.S. OASI Program

In this chapter we will undertake an empirical analysis of the U.S. Old-Age and Survivors (OASI) Program; this analysis will be based on the conclusions reached in Chapter 6. More specifically, in the first section we will employ equations (10) and (13) of Chapter 6 to make a few simulations of the cost of the OASI program under alternatives assumptions about certain economic and demographic variables. ¹ In the second section, we will employ equations (14) and (15) of Chapter 6 to decompose the cost of the OASI program for the period 1950-1978; this decomposition will highlight those factors that played an important role in the formation of the cost of the program in the past, and it might also give some indication of the evolution of the cost of the program in the future.