- Person
- Peter Diamond
- Lived
- b. 1940
- Field
- Economics, pensions
- From
- American
The story
Peter Diamond was born in New York City in 1940 into a Jewish family; his grandparents were immigrants from Poland, Russia and Romania, and his parents went to work straight from high school. He became one of the leading economic theorists of his generation at the Massachusetts Institute of Technology, known for work on taxation and on markets in which buyers and sellers must search for each other.
In 1974, on Paul Samuelson’s recommendation, he joined a panel on Social Security financing that advised the U.S. Senate Finance Committee. Pensions, he later wrote, were a perfect topic for him because they fitted both his interest in public finance theory and his social concerns. He went on to advise the Advisory Council on Social Security in the late 1980s and 1990s and was a founding member of the National Academy of Social Insurance in 1988.
In 2004, with Peter Orszag, he published Saving Social Security: A Balanced Approach. Rather than replacing the programme with private accounts, the book proposed closing its long-term funding gap through a mix of gradual changes on both the benefit and the revenue side, including adjustments for rising life expectancy and taxing a larger share of earnings, while protecting a basic lifetime benefit that stock market crashes and inflation cannot erode, and raising benefits for especially needy groups such as long-term low-wage workers and low-income widows and widowers.
His work did not stop at the American border. With Nicholas Barr of the London School of Economics he wrote Reforming Pensions: Principles and Policy Choices and Pension Reform: A Short Guide, which explain in plain terms what pension systems can and cannot do. He contributed to a 2005 study of social security reform in China, and in 2010 he and Barr produced a report of recommendations on pension reform there. In Chile, which had pioneered a system of private pension accounts, he and his co-authors met President Michelle Bachelet to discuss the country’s pension system. The Chinese University of Hong Kong lists the countries whose public pension systems he has advised on as including Australia, Chile, China, France, Germany, Italy, the Netherlands, New Zealand, Spain, Sweden, the United Kingdom and the United States.
Diamond has often closed his talks on Social Security with words from Franklin Roosevelt: that the test of progress is not whether we add to the abundance of those who have much, but whether we provide enough for those who have too little.
Why it matters
Diamond’s pension research has helped governments in the United States and around the world design retirement systems that stay solvent as people live longer while still protecting older people from poverty.
About Peter Diamond
MIT economist who explained why jobless workers and open jobs coexist, and whose pension research guided Social Security and retirement reform worldwide. Nobel Prize 2010.
Sources
- Peter A. Diamond, Biographical NobelPrize.org
- Distinguished Public Lecture: Good Pension Design Chinese University of Hong Kong
- Premio Nobel de Economía Peter Diamond visita la Universidad Pontificia Universidad Católica de Chile
- A Summary of Saving Social Security: A Balanced Approach Brookings Institution
- Peter Diamond Wikipedia
Another act of tikkun olam. This is part of tikkun olam, the Jewish idea of repairing the world, and every one of us can add to it.