Document Type

Master's Culminating Experience

Publication Date



Social Security has left its indelible mark on the American culture, however there still remains considerable debate over the effect it has had in curtailing personal savings for the express purpose of providing for one’s retirement. This study begins with a review of the origins of the modem Social Security system and critiques previous attempts at trying to quantify its impact on personal savings habits. While most previous attempts have aimed to construct a future benefits variable in order to measure this effect, it is presumed in this model that current observations and experiences with Social Security are the most significant factors in determining an individual’s level of preparation for retirement. Of particular concern is the effect information about several important Social Security factors has had in determining the aggregate level of personal savings for the nation. Under certain conditions, several of these factors seem to have a significant effect on the level of personal savings and each has its own measurable impact on the marginal propensity to save.