# Yung-Ping Chen

Yung-Ping Chen (November 24, 1930 – May 10, 2022) was an American economist and gerontologist of Chinese origin. He pioneered the concept of home equity conversion (reverse mortgages) in the United States and developed innovative approaches to the funding of Social Security benefits and long-term care. His scholarship contributed to a better understanding of the economic, political, and social implications and challenges created by the "mass aging" phenomenon—the ongoing and unprecedented shift to an increasingly elder-populated society.

## Biography

Born in Jingjiang, Jiangsu Province, China, Chen went to the United States for graduate school in 1955 and remained there to teach economics and gerontology for 50 years. He retired in 2009. He was married and had three children and six grandchildren. A graduate of National Taiwan University in Taipei, he received his M.A. and Ph.D. in Economics at the University of Washington, Seattle. He was professor emeritus of gerontology and a fellow in the Gerontology Institute at the University of Massachusetts Boston, where he was the first holder of the Frank J. Manning Eminent Scholar's Chair in Gerontology, a professorship established by the Massachusetts Legislature in 1988, and where he participated in launching the Ph.D. program in gerontology. Previously he was professor of economics and the first holder of the Frank M. Engle Distinguished Chair in Economic Security Research at the American College, Bryn Mawr, PA. Prior to that he taught at UCLA, Seattle Pacific College (now University), and the University of Washington. He served as delegate and/or consultant to four consecutive White House Conferences on Aging (1971 to 2005) and as delegate to the 1998 White House Conference on Social Security. A founding member of the National Academy of Social Insurance, he was a fellow in both the Gerontological Society of America and the World Demographic Association. He received the Actuarial Foundation's John E. Hanson Memorial Prize (2009, co-recipient), the Gerontological Society of America's Robert W. Kleemeier Award for Outstanding Research (2010), and the International Insurance Society's John S. Bickley Founder's Award Gold Medal for Excellence (2012).

## Work

Chen's research and associated program and policy proposals were founded on the principles of (a) fostering personal responsibility and societal solidarity by combining public- and private-sector programs and policies when feasible; (b) addressing the inevitable contingencies of individual and societal finances by employing risk-pooling mechanisms of both private and social insurance; (c) augmenting the potential benefits from finite budget resources facing individual, household, or government by means of tradeoffs; and (d) placing greater value on enhancing income generation opportunities for individuals than on providing financial assistance to them, while recognizing the need for the latter under certain circumstances. His portfolio of work, embodied in some 200 publications, encompassed a range of concepts, policies, and programs that have advanced the knowledge base regarding old-age economic security from both the individual and the societal point of view. Chen's work fell principally into six areas:
    1. Home-equity conversion (reverse mortgage)
    2. Financing and benefit structure of Social Security
    3. Funding long-term care
    4. Gaps in private pension coverage for minority workers
    5. Work and retirement options for older workers
    6. Special tax treatments and economic status of the aged

### Home-equity conversion (reverse mortgage)

In the early 1960s Chen began conducting research on income and wealth distribution among older persons. In an effort to address the dilemma of some older people being "income-poor and house-rich," Chen made the case for a voluntary conversion of home equity into annuity income as a means by which older homeowners could augment their income from other sources and keep their homes, while lessening the pressure on societal assistance programs. His 1973 monograph on the receptivity of home-equity conversion (reverse mortgage) inspired the first National Reverse Mortgage Development Conference in May 1979. The theory of home-equity conversion received a major boost in the policy arena when the reverse-mortgage concept was endorsed by the 1981 White House Conference on Aging. The first reverse mortgage was issued in 1989 under an FHA-guaranteed Home Equity Conversion Mortgage (HECM) as a pilot program authorized by the 1987 Housing and Community Development Act. The program was made permanent by an act of Congress in 1998.

### Financing and benefit structure of Social Security

Chen made a number of contributions to policy development in the area of Social Security, one of his career-long research interests. He developed the concept of "total dependency ratio" (which combines the ratios to the working-age population of both aged beneficiaries and dependent children) as an improved method for evaluating overall costs of dependent populations. His analysis of the topic was discussed at the 1979 Advisory Council on Social Security, and the Social Security trustees' annual report to Congress began reporting total dependency ratios along with aged dependency ratios, a practice that continues today.
Against a backdrop of intensifying public debate in the late 1970s about Social Security's long-term solvency, a 1981 article by Chen was the first to call attention to the implications of proliferating employee fringe benefits for the solvency of Social Security. This work helped guide financing discussions throughout the Social Security "crisis debates" of the 1980s. Chen's 1980 introductory Social Security text discussed the implications of changing family patterns for the benefit structure of Social Security. It pointed out that the largely static (and therefore outdated) Social Security benefit structure leaves the most financially vulnerable people—often women, minorities, and children—with increasingly less or no protection. He has continued to write and testify on this subject, urging legislative attention to the need to provide improved Social Security benefits not only to retired and disabled workers but also to their eligible dependents and survivors, including children.
In the 1990s, in an effort to resolve politically contentious debates regarding Social Security reform, Chen designed the "Social Security Plus Pension Supplement Plan" (SS + PS), combining social insurance and individual accounts, as a means for eliminating Social Security's long-range deficit while maintaining or improving rates of return for future beneficiaries. Envisioned as a 10-year national demonstration project that could be acceptable to both advocates of individual accounts and proponents of traditional methods of raising revenues and reducing benefits via social insurance principles, the plan was included in the document issued by the 1998 White House Conference on Social Security.

### Funding long-term care

In 1989 Chen proposed the idea of "trading off" a small portion of Social Security benefits (exempting low earners from the trade-off for this benefit) to create a "Social Security/Long-Term Care Plan" (SS/LTC) that would provide a basic level of long-term-care protection using the social insurance mechanism. The plan is based on a new model of public and private partnership consisting of a public social insurance benefit as a base, with supplementation from private long-term-care insurance and individual payments, while Medicaid (a welfare program) is kept as a safety net for the poor. SS/LTC is designed to make paying for long-term care more rational and dependable by (1) employing the insurance principle in the design of both private- and public-sector programs and (2) creating linkages to combine several sources of funds that currently exist both privately and publicly.

### Gaps in private pension coverage for minority workers

Chen was among the first to investigate the different coverage rates for black and Hispanic workers under private pension programs. His research in this area explored the nature of growing gaps in pension coverage between these minority workers and white workers, one result of which was to identify the "voluntary" nature of salary reduction plans (such as 401ks) as a key factor in these coverage gaps, since minority workers were less likely to elect enrollment in such programs.

### Work and retirement options for older workers

Chen's 1987 article, "Making Assets out of Tomorrow's Elderly," marked the beginning of his writing and research on the concept of "productive aging" and its associated implications for work and retirement. This concept is premised on the benefits of a changed societal perspective toward older people, recognizing their value as potential societal assets rather than primarily as societal liabilities. One outgrowth of such a perspective shift was the notion of "gradual retirement," based on growing concerns about a projected workforce decline as Baby Boomers reached retirement age, along with survey results that reflected many older people's interest in continuing to work part-time after retirement. Recognition of the many practical issues and complexities associated with phased retirement led Chen to argue for increased awareness of the need, both in the U.S. and abroad, for strategies that would create more work flexibility for workers in general—regardless of age, gender, or disability status—as a means of increasing the labor supply and promoting social cohesion via a universal policy that does not, de facto, pit one group of workers against another.

### Special tax treatments and economic status of the aged

Chen's interest in the economic circumstances of the aged dated to the beginnings of his career in the early 1960s, during which he conducted research examining the efficacy of tax measures favoring older people. As a result of this work his assistance was sought in the crafting and implementation of innovative "circuit-breaker" legislation in Wisconsin (involving property tax relief to older renters) and in California (involving a sliding scale for property tax concession, based on the assessed value of the older person's home and his or her income). His subsequent scholarship and policy development on the economic circumstances of older people emphasized the combined role of macroeconomic policies and individual behavior in providing economic security, while also stressing the problematic nature of achieving economic security in old age without accessible and adequately financed health care and long-term care.