Previous research generally concludes that early participants in the S
ocial Security system received a very good ''deal''-better than later
participants received and much better than future participants are lik
ely to get. However, researchers do not know the values of those deals
and their distribution across individuals and groups largely because
the necessary data have not been available. The study here uses the So
cial Security Administration's 1988 Continuous Work History Sample (CW
HS) to calculate early participants' real internal rates of return to
contributions. The study analyzes sex, race, household type, income, a
nd birth cohorts and employs new Census Bureau mortality projects to f
orecast more accurately how life expectancies and benefit streams vary
by race as well as by sex and birth cohort. Results contribute to an
understanding of how the Social Security system redistributes income.
All sample groups received high real rates of return. However, the ret
urns varied widely by household type, income level, birth cohort, and
other factors. The authors calculate that persons born from 1895 to 19
22 received a total transfer of $3.5 trillion, of which $1.3 trillion
remained to be paid as of 1988.