time separable, two period utility function is developed to consider the effect of an unfunded social security program on private saving. The theoretical results suggest that the effect of social security benefits on private saving in the mature phase of the U.S. Social Security program would be to reduce the saving level of each individual. The concept of social security wealth is used to estimate the implied effect of the current U.S. Social Security program on private saving. The major contribution in constructing the social security wealth variable is the simultaneous consideration of both the Medicare part of the U.S. Social Security program and the budget constraint of an unfunded U.S. system.;The estimation results generated by Johansen's FIML method for cointegration tests and the estimates found using a traditional AR(1) correction method are in conflict. This leaves open the debate over the hypothesis that the current U.S. Social Security system has substantially reduced private savings. My parameters of choice suggest that the deadweight loss of labor-market distortions due to the net OASDHI tax is about
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