Isaac Ehrlich, Melvin H. Baker Professor of American Enterprise in the School of Management and chair of the Department of Economics, says that our present Social Security system is partly to blame for a breakdown in the social and economic structure of the family, which, in turn, has adversely affected the family's impact on economic growth. Moreover, it has created a disincentive for parents to invest time and effort in their children. Traditionally, it has served as a form of old-age insurance, where parents bear, take care of and invest in children because they have an emotional and financial stake in their success.
Successful children are better able to take care of parents in old age.
That message has reduced America's incentive to form families or invest in children's futures. As evidence of this reluctance to form and nurture families, Ehrlich and Zhong point to a decline in U.S. marriage rates and an increase in divorce rates in the four decades since 1960, when Social Security taxes and benefits were raised significantly. They also show that in developed countries, such as the U.S., there has been a decrease in savings since 1960, which the researchers link to a reluctance to save for old age, influenced by the promise of a Social Security pension. Ehrlich further speculates that the Social Security system has contributed to other sociological phenomena in the U.S., including the creation of a less-motivated workforce and a cultural devaluing of education. Our current system creates a disincentive for parents to be involved in the education of their children, because the old-age benefits received by parents are independent of the achievements of their children.