Research and Analysis - Alphabetically

The Accuracy of Survey-Reported Marital Status: Evidence from Survey Records Matched to Social Security Records ^*

Many researchers have concluded that, in surveys, divorced persons often fail to report accurate marital information. In this paper, I revisit this issue using a new source of data--surveys exactly matched to Social Security data. I find that divorced persons frequently misreport their marital status, but there is evidence that the misreporting is unintentional. A discussion of possible improvements in surveys is presented. Implications for the study of differential mortality and the study of poverty among aged women are discussed.

Analysis of Social Security Proposals Intended to Help Women: Preliminary Results

One aspect of the current debate about changing the Social Security program concerns how new rules might affect elderly women, many of whom have low income. This paper examines three possible changes: (1) a reduction in spousal benefits combined with a change in the computation of the survivor benefit, (2) a redefined minimum benefit, and (3) a 5 percent increase in benefits for persons aged 80 or older. The paper assesses the cost, distributional consequences, and antipoverty impact of each option.

Annual Wage Trends for Supplemental Security Income Recipients

As a means-tested program, the Supplemental Security Income program considers a recipient's income from wages and other sources when determining eligibility and the monthly benefit amount. This study examines annual earnings for a sample of Supplemental Security Income recipients and, in the case of child recipients, their spouses and parents to evaluate the feasibility of using average annual wages in place of monthly wages when determining benefit amounts. The data show substantial variation in earnings from one year to the next. The results do not point to any clear distinctions in wage patterns among recipients or ineligible spouses and parents that would make any one group a better candidate for estimating and verifying wages on an annual basis.

Application of Experimental Poverty Measures to the Aged

This article examines poverty among persons aged 65 or older under experimental measures, which are based on a 1995 report released by the National Academy of Sciences. When compared with the official measure, the experimental measure produces higher poverty rates for all groups and narrower differences in poverty rates across groups.

Attrition in the New Beneficiary Survey and Followup, and Its Correlates

In this article we explore the extent of and reasons for attrition in the New Beneficiary Survey (NBS) between the first interview in 1982 and the followup interview in 1991. We examine a variety of potential determinants of attrition, separating the probability of attrition due to death from a refusal to be interviewed. Because the NBS sample is drawn from and linked to Social Security administrative records, information on mortality as a cause of attrition is exact. Hence, we are able to examine differences in the patterns and predictors of attrition due to these two causes of attrition and differences between attrition among retired and disabled workers.

A Benefit of One's Own: Older Women's Entitlement to Social Security Retirement

Using data from the Health and Retirement Study (HRS) and linked administrative records, we explore differences in old-age benefits between men and women attributable to differences in length of work life and pay. We find that most women are fully insured for Social Security purposes, but those who are not would have to work substantially more to become eligible. Among those who are eligible, additional work would translate into only slightly higher benefits.

The Canada Pension Plan's Experience with Investing Its Portfolio in Equities

This article examines the experience of the Canada Pension Plan (CPP) in investing its surplus funds in equities. The CPP investment policy is viewed by some experts as a possible model for increasing the investment income of Social Security. The article discusses the key features of this policy, its implementation, and results to date.

Changes in the Demographic and Economic Characteristics of SSI and DI Beneficiaries Between 1984 and 1999

During the past 20 years, legislative and judical actions have affected Supplemental Security Income and Disability Insurance beneficiaries. This article compares important changes in demographics, income sources and amounts, and poverty status of beneficiaries of both programs between 1984 and 1999, using data from the Survey of Income and Program Participation matched to administrative data from the Social Security Administration. The average age of both groups has decreased, while their education levels increased. In 1999, Disability Insurance beneficiaries and their families relied less on Social Security, while their poverty rate remained fairly constant. The Supplemental Security Income population had a lower poverty rate, while beneficiaries were slightly more reliant on Social Security for personal income.

Characteristics of Individuals with Integrated Pensions

This article uses data from the Health and Retirement Survey to examine the characteristics of individuals who are covered under integrated pension plans by comparing them with people covered by nonintegrated plans and those with no pension plan.

Characteristics of Individuals with Integrated Pensions ^*

Employer pensions that integrate benefits with Social Security have been the focus of relatively little research. Potentially this is an important omission given the current Social Security reform debate. Since changes in Social Security benefit levels and other program characteristics can affect the benefit levels and other features of integrated pension plans, it is important to know who is covered by these plans. This paper uses data from the Health and Retirement Survey to examine the characteristics of individuals who are covered under integrated pension plans by comparing them with people covered by non-integrated plans and those with no pension plan. The results show that individuals who are female, white, non-unionized, or do not have postgraduate education are significantly more likely to be in an integrated employer pension plan.

Child Support Payments and the SSI Program

In determining the benefit amount for a child, the Supplemental Security Income program excludes one-third of child support payments from countable income. Legislation reauthorizing the 1996 welfare reform law contains provisions that would encourage states to allow children receiving Temporary Assistance for Needy Families (TANF) to keep more of the child support paid by an absent parent. These potential changes provide impetus to revisit the way the SSI program treats child support.

Choice and Other Determinants of Employee Contributions to Defined Contribution Plans

Understanding the role that 401(k) plan characteristics, such as investment choice, play in participation and employee contributions is important as more workers rely on this type of retirement plan and as proposals for Social Security solvency include individual savings plans. Using the 1992 Health and Retirement Study, this article investigates which individual and job characteristics are associated with asset choice in defined contribution plans. Investment choice is found to substantially increase contributions to such plans.

Collecting Information on Disability in the 2000 Census: An Example of Interagency Cooperation

This article reports research and analysis undertaken by a very successful collaborative, federal interagency work group on disability, convened by the Office of Management and Budget and charged with the development of a short set of disability questions for Census 2000. The process that culminated in the final disability questions on Census 2000 is described, along with a discussion of the complexities of defining and measuring disability.

Comparing Beneficiaries of the Medicare Savings Programs with Eligible Nonparticipants

This note focuses on participation in two entitlement programs that help reduce out-of-pocket expenses for low-income Medicare beneficiaries: the Qualified Medicare Beneficiary (QMB) program and the Specified Low-Income Medicare Beneficiary (SLMB) program. As of 1999, about 2.75 million eligible, noninstitutionalized individuals were not enrolled in these Medicare savings programs. The eligible nonparticipants differed substantially from the QMB and SLMB participants in that they were less likely to be Supplemental Security Income beneficiaries and more likely to be elderly, nonblack, and in relatively good health. These findings, which could help target future outreach efforts, are based on Survey of Income and Program Participation data matched with administrative records from the Social Security Administration.

Comparing Replacement Rates Under Private and Federal Retirement Systems

This article presents a comparison of replacement rates for employees of medium and large private establishments to replacement rates for federal employees under the Civil Service Retirement System and the Federal Employees Retirement System. This analysis shows the possibility of replacement rates exceeding 100 percent for FERS employees who contribute 6 percent of earnings to the Thrift Savings Plan over a full working career. Private-sector replacement rates were quite similar for workers with both a defined benefit and a defined contribution pension plan.

Counting the Disabled: Using Survey Self-Reports to Estimate Medical Eligibility for Social Security's Disability Programs

This paper develops an approach for tracking medical eligibility for the Social Security Administration's (SSA's) disability programs on the basis of self-reports from an ongoing survey. Using a structural model of the disability determination process estimated on a sample of applicants, we make out-of-sample predictions of eligibility for nonbeneficiaries in the general population. This work is based on the 1990 panel of the Survey of Income and Program Participation. We use alternative methods of estimating the number of people who would be found eligible if they applied, considering the effects of sample selection adjustments, sample restrictions, and several methods of estimating eligibility/ineligibility from a set of continuous probabilities. The estimates cover a wide range, suggesting the importance of addressing methodological issues. In terms of classification rates for applicants, our preferred measure outperforms the conventional single variable model based on the "prevented" measure.

Under our preferred estimate, 4.4 million people--2.9 percent of the nonbeneficiary population aged 18-64--would meet SSA's medical criteria for disability. Of that group, about one-third have average earnings above the substantial gainful activity limit. Those we classify as medically eligible are similar to allowed applicants in terms of standard measures of activity limitations.

Demographic and Economic Characteristics of Children in Families Receiving Social Security

Each month, over 3 million children receive benefits from Social Security, accounting for one of every seven Social Security beneficiaries. This article examines the demographic characteristics and economic status of these children using Social Security administrative records matched to the 1996 Survey of Income and Program Participation. Most child beneficiaries receive benefits based on the earnings of a deceased or disabled parent, and nearly two-thirds live in female-headed families. The families of child beneficiaries rely about equally on earnings and income from Social Security for economic support. On average, the family income of child beneficiaries was 25 percent lower than that of all children, but there was no statistically significant difference in the poverty rates of the two groups.

The Development of the Project NetWork Administrative Records Database for Policy Evaluation

This article describes the development of SSA's administrative records database for the Project NetWork return-to-work experiment targeting persons with disabilities. The article is part of a series of papers on the evaluation of the Project NetWork demonstration. In addition to 8,248 Project NetWork participants randomly assigned to receive case management services and a control group, the simulation identified 138,613 eligible nonparticipants in the demonstration areas. The output data files contain detailed monthly information on Supplemental Security Income (SSI) and Disability Insurance (DI) benefits, annual earnings, and a set of demographic and diagnostic variables. The data allow for the measurement of net outcomes and the analysis of factors affecting participation. The results suggest that it is feasible to simulate complex eligibility rules using administrative records and create a clean and edited data file for a comprehensive and credible evaluation. The study shows that it is feasible to use administrative records data for selecting control or comparison groups in future demonstration evaluations.

Distribution of Zero-Earnings Years by Gender, Birth Cohort, and Level of Lifetime Earnings

This note uses data from the Modeling Income in the Near Term (MINT) project to estimate the distribution of zero-earnings years by gender, birth cohort, and level of lifetime earnings from 1951 to 1996. The analysis is focused mainly on zero-earnings years that fall within a worker's highest 35 years of earnings, because only these years are used in the calculation of benefits.

The Distributional Consequences of a "No-Action" Scenario

The 2001 report of the Social Security trustees projected that the combined trust funds for the Old-Age and Survivors Insurance and Disability Insurance programs will be exhausted in 2038. This analysis explains the effects of insolvency on future retirement benefits and poverty rates of beneficiaries if no action is taken to strengthen Social Security.

The Distributional Effects of Changing the Averaging Period and Minimum Benefit Provisions

This study evaluates the effects of changing the averaging period used to calculate Social Security benefits from 35 years to 38 or 40 years and the introduction of a minimum benefit provision for future retirees born during the early part of the baby boom generation. Proposals to change the averaging period have been recommended by a majority of the 1994-96 Advisory Council on Social Security. Based on the Survey of Income and Program Participation (SIPP) matched to Social Security Administration earnings records, the study projects retirement benefits for different subgroups of the population under existing and proposed benefit rules. The magnitudes of the retirees' benefit changes vary by demographic group. The minimum benefit provision substantially mitigates the effects of the change to a 40-year averaging period for some groups of women.

Divorced Women at Retirement: Projections of Economic Well-Being in the Near Future

This article describes the economic resources and economic well-being of future divorced women at retirement using data from the Social Security Administration's project on Modeling Income in the Near Term (MINT). The MINT model projects that in the near term, there will be more divorced women of retirement age. Because fewer of those women are projected to meet the 10-year marriage requirement, the proportion of economically vulnerable aged women is expected to increase when the baby boom retires.

Do Early Retirees Die Early? Evidence from Three Independent Data Sets ^*

In a 2001 working paper, Links Between Early Retirement and Mortality (ORES Working Paper No. 93), the author used corss-sectional Current Population Survey (CPS) matched to longitudinal Social Security administration data and found that men who retire early die soonet than men who wetire at age 65 or older. Estimates of relative mortality risk control for current age, year of birth, education, marital status in 1973, and race, and the sample is restricted to men who have lived to at least age 65.

This paper uses the 1982 New Beneficiary Survey and a 1 percent extract of the Social Security Administration's year 2000 Master Beneficiary Records to test whether the mortality differentials reported in the author's earlier work can be replicated in other independent data sets.

Does Retirement Education Teach People to Save Pension Distributions?

Education about retirement affects how employees use distributions from their defined contribution pension plans. Retirement education substantially increases the probability that participants age 40 and under will save a distribution but decreases the probability that college graduates and women will save one. These important differentials are concealed by estimates of the effect of retirement education on participants generally.

Early Retirees Under Social Security: Health Status and Economic Resources

Some proposals to change the Social Security program to ensure long-run solvency would reduce or eliminate benefits to some early retirees. To what extent might those benefit reductions cause hardship for individuals with precarious financial circumstances and whose health appears to limit their ability to offset reductions in Social Security income through increased earnings? Our research is intended to identify the size and characteristics of the population that might be at risk as a consequence of such changes.

The central finding is that over 20 percent of early Social Security retirees have health problems that substantially impair their ability to work. In fact, among those aged 62-64 who are severely impaired, there are as many Old-Age and Survivors Insurance beneficiaries as there are beneficiaries under SSA's two disability programs. The retirement program functions as a substantial, albeit unofficial, disability program for this age group. Moreover, the majority of the most severely impaired early retirees would not qualify for Disability Insurance benefits.

Early Retirees Under Social Security: Health Status and Economic Resources

Policies that would reduce or eliminate Social Security benefits for early retirees could have adverse consequences for older workers in poor health. This article documents the health and financial circumstances of beneficiaries aged 62-64. It examines the extent to which poor health limits work among early retirees and assesses the extent to which curtailment of early retirement benefits might lead to increases in the Disability Insurance program rolls.

Earnings Histories of SSI Beneficiaries Working in December 1997

This article looks at the history of earnings in covered employment for the 300,000 disabled SSI beneficiaries who were working in December 1997. It provides background information on beneficiaries essential to SSA's efforts to help them return to work.

Earnings of Black and Nonblack Workers Who Died or Became Disabled in 1996 and 1997

Social Security solvency proposals may affect blacks as a group differently than those of other races because of differences in earnings, mortality, and rates of disability. To provide some background for understanding this issue, this note examines the earnings of workers by age and race, comparing those who recently died or became entitled to Social Security disability benefits with those still alive. It does not analyze any specific proposal for changing benefits.

The Economic Well-Being of Social Security Beneficiaries, with an Emphasis on Divorced Beneficiaries ^*

There are numerous types of benefits paid under the Social Security programs of the United States, with each type of benefit having its own set of eligibility rules and benefit formula. It is likely that there is an association between the type of benefit a person receives and the economic circumstances of the beneficiary. This paper explores that association using records from the Current Population Survey exactly matched to administrative records from the Social Security Administration. Divorced beneficiaries are a particular focus of this paper.

Type of benefit is found to be a strong predictor of economic well-being. Two large groups of beneficiaries, retired-worker and aged married-spouse beneficiaries, are fairly well off. Other types of beneficiaries tend to resemble the overall U.S. population or are decidedly worse off. Divorced-spouse beneficiaries have an unusually high incidence of poverty and of serious health problems. A proposal to increase benefits for these beneficiaries is evaluated. Results indicate that much of the additional government expenditures would be received by those with low income.

The Economics of Retirement: A Nontechnical Guide ^*

This paper provides a nontechnical explanation of the basic ideas that underpin economists' thinking about work and retirement decisions and discusses and elaborates on the basic economic model of retirement. The paper begins with a simple economic model of an individual's work decision, to explain the construction and logic of this model, and to show how the model can be used to make basic predictions about factors that might plausibly affect the timing of retirement. From this starting point--which essentially describes the economic retirement models before the late 1970s--the paper then explains how the model has been extended during the past 2 decades. The increasing sophistication and complexity of the models reflect scientific progress in which new retirement research incorporates the findings of previous efforts, the desire to incorporate more realism into the models, and the availability of improved data. The progress in economic modeling is emphasized as the contributions of various influential studies are reviewed.

The Effect of Welfare Reform on SSA's Disability Programs: Design of Policy Evaluation and Early Evidence

Recent legislation has affected the populations served by the Social Security Administration's (SSA's) disability programs. The Contract with America Advancement Act of 1996 mandated that persons whose disability determination was based on drug addiction or alcoholism be removed from the Supplemental Security Income and Social Security Disability Insurance rolls. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (later amended by the Balanced Budget Act of 1997) tightened the SSI eligibility criteria for children and converted the Aid to Families with Dependent Children program into a block grant, Temporary Assistance for Needy Families. This article describes the design of three related studies evaluating the direct and indirect effects of these policy changes on SSA's disability populations. It describes the methodological challenges of the studies and the strategies used to overcome them. It also presents early evidence from the three studies and discusses future directions.

Effect on Benefits of Earnings at Ages 65 or Older, 1995

A major policy issue for the Social Security program is the treatment of earnings of persons who have attained retirement age. This article discusses the retirement test and recomputation of benefit provisions and provides statistical data for 1995.

In 1995, about 806,000 persons aged 65-70 had significant earnings resulting in the withholding of benefits by the retirement earnings test. About 1,659,000 persons aged 65 or older realized an increase in their benefit amount because of their earnings.

Effects of the Project NetWork Demonstration Waiver Provisions

Eligibility for the Medicare Buy-in Programs, Based on a Survey of Income and Program Participation Simulation

Fewer people appear eligible for Medicare buy-in programs than most earlier research indicated, implying that participation rates may be higher than previously believed. The authors estimate a 63 percent rate of participation among those eligible for the combined Qualified Medicare Beneficiary and Specified Low-Income Medicare Beneficiary programs in 1999. The estimates are based on Survey of Income and Program Participation data matched to the Social Security Administration's administrative records. The matched data provide information of better quality than the data used in previous studies.

The Erosion of Retiree Health Benefits and Retirement Behavior: Implications for the Disability Insurance Program

The number of companies offering health benefits to early retirees is declining, although reductions in the percentage of early retirees covered by health insurance have been only slight to date. In general, workers who will be covered by health insurance are more likely than other workers to retire before the age of 65, when they become eligible for Medicare. What effect that will have on claims under the Disability Insurance program is not yet clear.

Evaluating the Initial Impact of Eliminating the Retirement Earnings Test

How did workers aged 65–69 respond to the removal of the retirement earnings test in 2000? Using Social Security administrative data matched with data from the Survey of Income and Program Participation, the author finds that the higher earners in this group increased their earnings, while the lower earners did not. The author reports an acceleration of benefit applications by workers aged 65–69 but no clear evidence of increased employment in this age group.

Executive Summary from—Technical Panel on Assummptions and Methods (2003); Report to the Social Security Advisory Board

The full report is available at http://www.ssab.gov/NEW/documents/2003TechnicalPanelRept.pdf.

Family Unit Incomes of the Elderly and Children, 1994 ^*

The economic status of the elderly and the economic status of children are analyzed using a comprehensive definition of income that takes selected types of noncash income and taxes into account. Estimates are presented for detailed age groups over the entire age range and for socioeconomic classifications within the elderly subgroup and within the subgroup of children. The paper finds that children and the elderly are less well off than the middle age groups. This result is obtained using median incomes and the percentage of the group that has low income, as defined here. When results obtained with the measures presented in this paper are compared with results obtained with more commonly used measures, there are important differences for both the elderly and for children. For both groups, the composition of the low-income population differs in important ways from the composition of the official poverty population.

Follow-up of Former Drug Addict and Alcohol Beneficiaries

The Galveston Plan and Social Security: A Comparative Analysis of Two Systems

This report presents a comparison of benefits under the Galveston Plan versus Social Security, based on different earner and family scenarios. These scenarios include single and married workers at the low, middle, high, and very high earnings levels.

A Guide to Social Security Money's Worth Issues ^*

This paper discusses some of the major issues associated with the question of whether workers receive their money's worth from the Social Security program. An effort is made to keep the discussion as nontechnical as possible, with explanations provided for many of the technical terms and concepts found in the money's worth literature. Major assumptions, key analytical methods, and money's worth measures used in the literature are also discussed. Finally, the key findings of money's worth studies are summarized, with some cautions concerning the limitations and appropriate usage of money's worth analyses.

Historical Redistribution Under the Social Security Disability Insurance Program ^*

This study uses Social Security administrative data on historical taxes and benefits by year, age, gender, and race for an ex post analysis of redistribution under the Disability Insurance program. The relationship between the taxes paid and benefits received to date under the program is described for successive cohorts as a whole and for specific race and gender groups both within cohorts and across time.

Historical Redistribution Under the Social Security Old-Age and Survivors Insurance Program ^*

This study uses Social Security administrative data on past earnings and benefits by year, age, sex, and race to analyze historical redistribution under the Old-Age and Survivors Insurance program across and within cohorts born through the year 1922. The results generally support the findings of closely related previous research, confirming that early cohorts have received large accumulated net transfers to date, that females, as a group, have experienced substantially higher accumulated benefit/tax ratios and internal rates of return than their male counterparts in these cohorts, and that the "Other Races" group fared better by these measures than the "White" race group in most of the cohorts considered. Differences by race in the accumulated benefit/tax ratios estimated in this analysis are sensitive to the choice of the interest rate series and cohort grouping, however, and differ sharply between males and females under some of the interest rate assumptions.

How Many SSI Recipients Live with Other Recipients?

The Office of Policy recently completed an analysis of the prevalence of multi-recipient households in the Supplemental Security Income (SSI) program. The study was based on Survey of Income and Program Participation (SIPP) data for December 1998 matched to administrative records from the Social Security Administration (SSA).

How Policy Variables Influence the Timing of Applications for Social Security Disability Insurance

The onset of a work-limiting health condition may lead workers to reevaluate their lifetime work path. This article analyzes the impact of policy variables--employer accommodations, state Social Security Disability Insurance (DI) acceptance rates, and DI benefits--on the timing of DI applications for such workers.

How Raising the Age of Eligibility for Social Security and Medicare Might Affect the Disability Insurance and Medicare Program

This article considers two hypothetical scenarios--one in which the Medicare eligibility age is raised to 67 along with the scheduled increase in the normal retirement age, and one in which eligibilitty for both programs is raised to age 70. It then projects the effects that each of those changes would have on Social Security Disability Insurance participation, Medicare participation, and Medicare expenditures.

Identifying the Race or Ethnicity of SSI Recipients

Despite many decades of data collection, SSA has problems presenting data on the race and ethnicity of program beneficiaries. By using several statistical techniques, however, it is possible to make better use of the data at hand.

The Impact of Repealing the Retirement Earnings Test on Rates of Poverty

This article summarizes an analysis of the poverty implications of repealing the retirement earnings test (RET). Repealing the RET at the normal retirement age or older is unlikely to generate large poverty effects. Removing the test at age 62 or older, however, could lead to large increases in poverty.

Impacts of the Project NetWork Demonstration

Improving Child Support Enforcement for Children Receiving SSI

This article examines child support provisions in the Supplemental Security Income (SSI) program and other means-tested programs. It also discusses policy options for improving receipt of child support for children receiving SSI and ways that SSA could gain better access to child support data.

Improving Return-to-Work Strategies in the United States Disability Programs, with Analysis of Program Practices in Germany and Sweden

This article examines suggestions by the General Accounting Office (GAO) to improve the rate of rehabilitation of workers on the disability rolls. It examines GAO's suggestions within the context of research by experts on return-to-work practices in Germany, Sweden, and the United States. It also discusses lessons learned from the European experiences and current and past return-to-work initiatives used in the Social Security Disability Insurance and Supplemental Security Income programs.

Income Growth and Future Poverty Rates of the Aged ^*

This paper estimates effects on elderly poverty rates of a steady growth in incomes for 50 years. It assumes that the poverty threshold continues to be adjusted for inflation but not for increases in real incomes. Simulations with the March 1998 Current Population Survey indicate that if Social Security and Supplemental Security Income (SSI) benefit rules are not changed and if earnings and other incomes grow by 1 percent per year (the growth rate in earnings assumed in the Social Security Trustees' Report intermediate scenario) in an otherwise unchanging population, poverty among the elderly will decrease from 10.5 percent to about 7.7 percent in 2020 and to 4.8 percent in 2047. Those projected poverty rates are quite sensitive to the earnings growth rate assumption and to the assumption that benefits are not further reduced to maintain solvency. The paper quantifies the sensitivity to these assumptions and discusses several other aspects that might affect future poverty rates--changes in other income components like SSI, earnings, and pensions; changes in longevity and marital patterns; and changes in the distribution of earnings.

Income Growth and Future Poverty Rates of the Aged

This article estimates effects of future growth in income on the poverty rates of the elderly. If real earnings and other income were to increase steadily at 1 percent per year, poverty among the elderly, 10.5 percent in 1997, would decrease to about 7.2 percent in 2020 and to 4.1 percent in 2047, assuming no Social Security benefit reductions to maintain solvency. The article discusses several other aspects that might affect future poverty rates, including changes in other income components like Supplemental Security Income, earnings, and pensions; changes in longevity and marital patterns; and changes in the distribution of earnings.

Incomes of the Elderly and Nonelderly, 1967-92 ^*

This paper examines the money incomes of the elderly and the nonelderly. The economic status of the elderly is put in perspective by discussing changes in real incomes since 1967 and the income of the elderly relative to the incomes of other age groups. Detailed age groups within both the elderly and nonelderly groups are examined. The paper finds that the economic status of the elderly in 1992 was substantially better than in 1967 but was about the same as in 1984. The real median income of the elderly rose from 1967 to 1989 but fell from 1989 to 1992. The ratio of the income of the elderly to that of the nonelderly was higher in 1992 than in 1967, but the 1992 ratio was below the 1984 ratio. Large increases in mean Social Security benefits were important in the increase in the total income of the elderly since 1967.

Industry, Occupation, and Disability Insurance Beneficiary Work Return

This article uses the New Beneficiary Data System to describe the first job held after award of Disability Insurance benefits, in terms of occupation and industry. It examines work activity within sectors of employment and looks at the issues of whether work return in certain industries and occupations varies according to the demographic characteristics of the beneficiaries. The article also presents data on sector-specific employer accommodations that can aid in sustained work return.

Postentitlement work was fairly evenly distributed across occupational and industrial sectors. Persons with higher levels of educational attainment were found to be in white-collar employment sectors. There were noticeable differences in the availability of employer accommodations across postentitlement occupations and industries.

Initial Results and Evaluation Design for the SSA Medicare Part B Buy-in Demonstration

Introduction and Overview from—2004 Annual Report of the Board of Trustees of the Federal OASDI Trust Funds

The full report is available at http://www.socialsecurity.gov/OACT/TR/TR04.

Legislative History of Title VIII of the Social Security Act

This article details the congressional effort to recognize the important contributions of Filipino veterans in World War II that led to the enactment of a new title VIII of the Social Security Act, "Special Benefits for Certain World War II Veterans." It describes the evolution of a proposal to pay a reduced Supplemental Security Income (SSI) benefit to Filipino and other World War II veterans who want to return to their homeland or otherwise live outside the United States. The article highlights the different options considered and the early implementation of payments by the Social Security Administration under the new program. Title VIII is the first benefit program administered by the Social Security Administration since the enactment of the legislation that created the SSI program in 1972.

Life-Cycle Aspects of Poverty Among Older Women ^*

In this paper we focus on the relationship between a woman's economic status earlier in life and her poverty status in old age. Previous research on the determinants of poverty among aged women has documented the socioeconomic and demographic correlates of the poor and has examined the financial impact of adverse late-life events such as widowhood, deterioration of health, and loss of employment. Using data from the National Longitudinal Survey of Mature Women, we find that most women who experience these types of adverse events in their later years do not become poor and that a large majority of older NLSMW respondents who were poor in 1991-92 were poor earlier in their adult lives. Whether women are impoverished by adverse late-life events depends on their economic resources just prior to the event. But the financial resources available in old age, in turn, depend very much on their long-term economic status throughout much of their adult lives. This article underscores the fact that for most older women these adverse events do not appear to precipitate poverty spells--at least not within the first couple of years--and directs attention at longer-term circumstances that make some women more vulnerable.

Lifetime Distributional Effects of Social Security Retirement Benefits

This article presents three measures of the distributional effects of Social Security benefits on actual and projected retirement income of workers born between 1931 and 1960. Microsimulations take into account marital history, the sharing of incomes and tax burdens within couples, and differences in life expectancy among subgroups of the population. More important than changes in tax rates or benefits are changes in the demographics and earnings patterns of the workforce, particularly the higher lifetime covered earnings of women. The growing share of women receiving worker benefits instead of spouse or survivor benefits, plus the increased proportion of retirees who are divorced, make Old-Age and Survivors Insurance (OASI) benefits more progressive, even in the face of declining net benefits.

Lifetime Earnings Patterns, the Distribution of Future Social Security Benefits, and the Impact of Pension Reform

Policymakers have long been interested in understanding the adequacy and distribution of Social Security benefits and in predicting the effects of reform on representative workers. This article describes two new methods for estimating the career profile of earnings for representative workers. It then compares the results of those new methods with earnings profiles assumed in traditional distributional analysis of Social Security and shows the implications of the new results for evaluating Social Security reform.

Lifetime Redistribution Under the Social Security Program: A Literature Synopsis ^*

This paper provides a brief overview of the more important studies of lifetime redistribution under the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) programs. Studies are categorized into two types: those that focus on redistribution across successive cohorts of workers or typical members of those cohorts, and those that focus on the distribution of results across characteristics of interest within particular cohorts of workers. A list of related studies is provided at the end for those interested in additional reading.

Lifetime Redistribution Under the Social Security Program: A Literature Synopsis

This article provides a brief overview of the more important studies of lifetime redistribution under the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) programs. Studies are categorized into two types: those that focus on redistribution across successive cohorts of workers or typical members of those cohorts and those that focus on the distribution of results across characteristics of interest within particular cohorts of workers. A list of related studies is provided for those interested in additional reading.

Linkages with Data from Social Security Administrative Records in the Health and Retirement Study

The Health and Retirement Study is a major longitudinal study designed for scientific and policy researchers looking at the economics, health, and demography of retirement and aging. This note describes the data from SSA records that have been released for linking to HRS data, linkage rates resulting from the consent process, and subgroup patterns in linkage rates.

Linkages with Data from Social Security Administrative Records in the Health and Retirement Study ^*

The Health and Retirement Study (HRS) is a major longitudinal study designed for scientific and policy researchers for study of the economics, health, and demography of retirement and aging. The primary HRS sponsor is the National Institute of Aging, and the project is being conducted by the Survey Research Center of the Institute for Social Research at the University of Michigan. Several agencies, including the Social Security Administration, are supporting the project. This is the second paper describing SSA's data support for the HRS. It describes the data from SSA records that have been released for linking to HRS data, linkage rates resulting from the consent process, and subgroup patterns in linkage rates.

Links Between Early Retirement and Mortality ^*

In this paper I use the 1973 cross-sectional Current Population Survey (CPS) matched to longitudinal Social Security administrative data (through 1998) to examine the relationship between retirement age and mortality for men who have lived to at least age 65 by 1997 or earlier. Logistic regression results indicate that controlling for current age, year of birth, education, marital status in 1973, and race, men who retire early die sooner than men who retire at age 65 or older. A positive correlation between age of retirement and life expectancy may suggest that retirement age is correlated with health in the 1973 CPS; however, the 1973 CPS data do not provide the ability to test that hypothesis directly.

Medicare Premium Buy-in Programs: Results of SSA Demonstration Projects

In response to a Congressional mandate, SSA tested six different techniques to increase enrollment in programs that pay some Medicare expenses, such as premiums, for low-income individuals. This article describes these outreach projects, provides estimates of the eligible population, and discusses what could be expected for future efforts based on the results of the project.

Methods in Modeling Income in the Near Term (MINT I)

This paper summarizes the work completed by SSA, with substantial assistance from the Brookings Institution, RAND, and the Urban Institute, for the Modeling Income in the Near Term (MINT I) model. In most cases, several methods of estimating and projecting demographic characteristics and income were researched and tested; however, this appendix describes only those methods eventually used in the MINT I model.

Military Veterans and Social Security

Military veterans constitute an important subgroup of Social Security beneficiaries. Because veterans are a large subgroup of Social Security beneficiaries and because policymakers have shown a clear interest in their well-being, it is important to understand how veterans and their dependents are currently faring. This note looks at the characteristics and trends in growth of the veteran and Social Security populations.

Minorities and Social Security: An Analysis of Racial and Ethnic Differences in the Current Program

This report addresses how individuals from various racial and ethnic groups fare under the current Social Security system. It examines the relative importance of Social Security for these individuals and how several aspects of the system affect them.

Model Income in the Near Term--Projections of Retirement Income Through 2020 for the 1931-60 Cohorts

Modeling SSI Financial Eligibility and Simulating the Effect of Policy Options

This article presents the Supplemental Security Income (SSI) Financial Eligibility Model developed in the Division of Policy Evaluation of the Office of Research, Evaluation, and Statistics. Focusing on the elderly, the article simulates five potential changes to the SSI eligibility criteria and presents the effects of those simulations on SSI participation, federal benefits, and poverty among the elderly. Finally, the article discusses future directions for research and potential improvements to the model.

Mortality Differentials by Race ^*

In the 2001 report of the President's Commission to Strengthen Social Security, the commission states that blacks "on average have both lower incomes and shorter life expectancies than other Americans." This paper examines the extent to which the shorter life expectancies of blacks are explained by differences between their average socioeconomic status and that of other Americans.

Estimates in this paper for men aged 25 to 64 show that about half of the difference in risk of death between blacks and all other races was explained by education level--the measure of socioeconomic status employed. At ages 65 to 90, black men were not found to have a significantly higher risk of death than men of all other races.

Near Term Model Development, Part II

The Net Effects of the Project NetWork Return-to-Work Case Management Experiment on Participant Earnings, Benefit Receipt, and Other Outcomes

This article summarizes the results of a major social experiment initiated by the Social Security Administration to test case management as a tool of promoting employment among persons with moderate to severe disabilities. This comprehensive analysis shows the benefits of using an experimental design to derive realistic net outcome estimates. While the results cannot be generalized to other case management interventions, they are nevertheless instructive for planning new initiatives.

Occupational Experience and Socioeconomic Variations in Mortality ^*

This paper explores the extent to which occupational experience is responsible for the adverse effect of low income and education on mortality. Using Current Population Survey data on education and disability matched to Social Security data on earnings, disability, and mortality, this question is pursued by examining how the estimated effects of income and education are affected once occupational experience is included in the mortality model. The inclusion of various occupational experience variables, as measured in the Dictionary of Occupational Titles and the National Occupational Hazards Survey, has virtually no effect on the estimated effects of income and education on mortality. These findings suggest that the high mortality of low-income and poorly educated persons is not due to characteristics of their employment but to other aspects associated with poverty.

Older Workers' Progression from Private Disability Benefits to Social Security Disability Benefits

Older workers who receive short-term disability benefits to compensate them for medical conditions that limit their ability to work are three times more likely than younger workers to progress to permanent public disability benefits. This article documents the base rates of progression from short-term private to long-term private to permanent public disability benefits among older workers with various medical conditions.

Outcome Indicators

Participation in Voluntary Individual Savings Accounts: An Analysis of IRAs, 401(k)s, and the TSP

This article compares participation rates in three existing voluntary individual account-type plans--individual retirement accounts (IRAs), 401(k)s, and the federal Thrift Savings Plan (TSP)--in an effort to analyze who might participate in a voluntary individual account system.

Pension Integration and Social Security Reform ^*

Many employer-provided pension plans explicitly account for Social Security in their benefit formulas--a practice known as integration. Because integrated pensions are directly linked to Social Security, both the incidence and design of explicitly integrated plans are likely to be affected by changes in the current Social Security program. While integration has been mentioned as an important issue in discussions of Social Security reform, researchers have largely ignored the concept of pension integration. This paper provides basic information about pension integration and addresses, in general terms, the relationship between Social Security reform and pension integration.

Pension Sponsorship and Participation: Trends and Policy Issues

This article summarizes recent trends in employer sponsorship of retirement plans and employee participation in those plans. It is based on data collected in surveys of employers conducted by the U.S. Department of Labor's Bureau of Labor Statistics and surveys of households conducted by the U.S. Census Bureau.

Policy Evaluation of the Effect of Legislation Prohibiting the Payment of Disability Benefits to Individuals Whose Disability is Based on Drug Addiction and Alcoholism

Policy Evaluation of the Effects of the 1996 Welfare Reform Legislation on SSI Benefits for Disabled Children: First Round Case Study Findings

Policy Evaluation of the Effects of the 1996 Welfare Reform Legislation on SSI Benefits for Disabled Children: Second Round Case Study

Policy Evaluations of the Overall Effects of Welfare Reform on SSA Programs

Projecting Immigrant Earnings: The Significance of Country of Origin ^*

This paper asks whether information about immigrants other than their age, education, and years since migration can be productively used to project their earnings. Although many factors could affect immigrants' earnings, what is most useful for Social Security modeling purposes is relevant information that is readily available on a continuous basis. Country of origin is a good candidate as it is regularly and readily available from several administrative and survey data sources.

In this paper, microdata samples from the 1960-1990 censuses are used to examine the relationship between country of origin and the earnings of immigrants. By following cohorts of immigrants over 10-year intervals, we learn how country of origin affects the initial earnings of immigrants and how the relationship between country of origin and immigrants' earnings changes as immigrants live in the United States. The paper also presents theoretical insights and empirical evidence about the underlying causes of the link between country of origin and immigrants' earnings.

Projecting Retirement Income of Future Retirees with Panel Data: Results from the Modelng Income in the Near Term (MINT) Project

This article describes a model that projects the retirement income of Social Security beneficiaries from 1997 through 2031 using a number of panel data sources. With these data, we examine the composition of retirement income for future retirees in various birth cohorts, racial groups, marital states, and educational categories.

Public Pension Reform in Japan

The March 2000 pension reform in Japan focused on the long-term financial sustainability of the countrys two-tiered public pension system. This article describes the prereform system, the reform process, the key changes stipulated by the reform, and the projected impact of the reform on future pension costs.

Racial and Ethnic Differences in Wealth and Asset Choices

Analysis of the wealth held by white, black, and Hispanic households points to differences in saving behavior, notably a disinclination on the part of minority households to invest in riskier, higher-yielding financial assets. This finding may account for some of the great disparities in wealth across racial and ethnic groups that cannot be explained by income and demographic factors.

Racial and Ethnic Differences in Wealth Holdings and Portfolio Choices ^*

There are large differences in wealth across racial and ethnic groups, much of which remain unexplained even after controlling for income and demographic factors. This paper studies the issue of whether differences in saving behavior and rates of return on assets are a possible source of the differences in wealth. It uses data from the Health and Retirement Study to examine the differences in various components of aggregate wealth (including nonhousing equity, housing equity, financial assets, and risky assets) and to inspect differences in portfolio choices by race and ethnicity.

Descriptive tabulations of components of aggregate wealth and portfolio choices shown here point to differences between white and minority households in their saving behavior and choice of assets. These findings suggest that some of the large differences in wealth across racial and ethnic groups that remain unexplained even after controlling for income and demographic factors, may be attributable to the smaller participation in financial markets by minority households.

The RAND HRS Data File: A User-Friendly Version of the Health and Retirement Study

Recent Changes in Earnings Distributions in the United States ^*

In this paper I use large, Social Security administrative data sets to examine changes in earnings distributions in the U.S. over the 1980s and early-1990s. Because the earnings information contained in these data sets comes directly from the W-2 forms filed by employers, the self-reporting errors and top-coding problems common in other data used for this type of analysis are minimized. Previous research has documented an increase in overall earnings inequality during the 1970s and the 1980s. While I too find that overall earnings inequality generally increased during the early- to mid-1980s, I find that this upward trend in earnings inequality might have slowed, or reversed, during the late-1980s and early 1990s. I also find that within-group inequality for various race and gender subgroups of the population generally increased over the period examined, confirming the results of others and extending those findings into the early 1900s. Finally, I find that women's earnings increased relative to men's earnings over the entire period and that the earnings of black males declined relative to the earnings of the other groups examined.

Recent Changes in Earnings Distributions in the United States: Age and Cohort Effects ^*

In this paper, the author uses large Social Security administrative data sets to examine changes in earnings distributions in the United States over the 1980s through the mid-1990s. Because the earnings information contained in these data sets comes directly from the W-2 forms filed by employers, the self-reporting errors and top-coding problems common in other data used for this type of analysis are minimized. Previous research has documented an increase in overall earnings inequality during the 1970s and the 1980s. The author finds that this upward trend in overall earnings inequality continues in the mid-1990s, despite a period of nearly constant or slightly decreased earnings inequality from 1988 through 1992. The data also suggest that between-group earnings inequality, whether dividing the sample into groups by age group or by birth cohort, is increasing. Despite the increase in between-group earnings inequality over the period examined, however, within-group inequality remains by far the largest contributor to overall inequality.

Recent Changes in Earnings Distributions in the United States: Age and Cohort Effects

In this article, the author uses large, Social Security administrative data sets to examine changes in earnings distributions in the United States over the 1980s through the mid-1990s. Because the earnings information contained in these data sets comes directly from the W-2 forms filed by employers, self-reporting errors and top-coding problems, common in other data used for this type of analysis, are minimized. Previous research has documented an increase in overall earnings inequality during the 1970s and the 1980s. The author finds that this upward trend in overall earnings inequality continues into the mid-1990s, despite a period of nearly constant or slightly decreasing inequality from 1988 through 1992. The data also suggest that between-group earnings inequality, whether dividing the sample into groups by age group or by birth cohort, is increasing. Despite the increase in between-group earnings inequality over the period examined, however, within-group inequality remains by far the largest contributor to overall inequality.

Recent Changes to the Chilean System of Individual Accounts

Chile was the first country to replace its public pay-as you-go system with individual accounts. Since its inception in 1981, the new program has undergone a number of changes that offer workers more choices than they had before. This note describes those changes, which include an increase in the type and number of funds from which a worker may choose for an individual account, more incentives for making additional voluntary contributions, and the introduction of a separate mandatory individual account for unemployment benefits.

Recruiting SSA's Disability Beneficiaries for Return-to-Work

Reducing Poverty Among Elderly Women

Although the Social Security program has substantially reduced poverty among older Americans, 17.3 percent of nonmarried elderly women (widowed, divorced, or never married) are living in poverty today. This paper explores several policy options designed to reduce poverty by enhancing Social Security widow(er)'s benefits, Supplemental Security Income benefits, and Social Security's special minimum benefit. Depending on the option, 40 percent to 58 percent of the additional federal spending would be directed to the poor or near poor.

Results of the Office of Policy's 2001 User Satisfaction Survey

Results of a 2001 Gallup poll indicate that the majority of users of the Social Security Administration's (SSA's) research, statistical, and policy products are satisfied with them and with the agency's performance in identifying and working on new and emerging areas of research and policy. Satisfaction varies with professional interests, length of time working with Social Security and Supplemental Security Income issues, work affiliation, and frequency of use of SSA's products.

Retirement and Wealth

This article analyzes the relationship between retirement and wealth. Using data from the first four waves of the longitudinal Health and Retirement Study--a cohort of individuals born from 1931 to 1941--we estimate reduced-form retirement and wealth equations. Our results show that those who retire earlier do not necessarily save more and that even if one's primary interest is in the relationship between Social Security policy and the decision to retire, it is important to incorporate saving behavior and other key decisions into the analysis.

Retirement Income Security in the United Kingdom

This article examines the U.K. retirement income security system from the American perspective. It addresses issues that most concern U.S. analysts: how the United Kingdom has kept its future public pension costs at a manageable level, the extent to which privatization of public pensions has contributed to low pensions costs, the popular appeal of individual pension accounts, and the impact of privatization on retirement income. These issues are best understood in the context of the U.K. pension program's particular institutional structure and policies, two of which--"contracting out" of public pensions and strong reliance on means-tested benefits--have been largely rejected in the evolution of U.S. policy to date.

Particular use is made of recently available data on coverage rates for public and private pension programs over the total working population and administrative records on inactive personal pension accounts.

Retirement Income Security in the United Kingdom ^*

This study examines the United Kingdom's retirement income security system from the American perspective. It addresses issues that most concern U.S. analysts: how the United Kingdom has kept its future public pension costs at a manageable level, the extent to which privatization of public pensions has contributed to these savings, the popular appeal of individual pension accounts, and the impact of privatization on retirement income. These issues are best understood in the context of the U.K. pension program's particular institutional structure and policies, two of which--"contracting out" of public pensions and strong reliance on means-tested benefits--have been largely rejected in the evolution of U.S. policy to date.

Particular use is made of recently available data on coverage rates for public and private pension programs over the total working population and administrative records on inactive personal pension accounts.

Retirement Outcomes in the Health and Retirement Study

This study examines retirement outcomes in the first four waves of the 1992-1998 Health and Retirement Study (HRS). The article compares outcomes under alternative definitions of retirement, describes differences in outcomes among demographic groups, compares retirement dynamics based on self-reported retirement status, and compares retirement flows in the 1990s and the 1970s and between cohorts of the HRS. Among other findings, measured retirement is seen to differ, sometimes substantially, with the definition of retirement used among the various groups analyzed.

The Retirement Prospects of the Baby Boom Generation ^*

This paper examines the financial prospects of the baby boomers in their elderly years. The paper primarily attempts to draw together and summarize results found by other researchers, but a few new estimates are presented. The consensus of the research appears to be the following. Up to this point, the baby boom generation as a whole has a higher economic status than their parents' generation did at the same ages, but this does not hold for some subgroups. When it becomes elderly, the baby boom generation as a whole probably will have a higher economic status than their parents' generation has and will have at those ages, but, again, this may not hold for some subgroups. It is uncertain whether the baby boom generation as a whole will have enough resources in retirement to maintain their preretirement standard of living without increasing their saving or retiring later, but some subgroups will be able to maintain their living standard without changing their behavior.

Social Security Administration, Office of Policy: 2001 Customer Satisfaction Survey, Final Report

The Social Security Administration's Death Master File: The Completeness of Death Reporting at Older Ages

To provide a more detailed assessment of the coverage of deaths of older adults in the Social Security Administration's Death Master File (DMF), this research note compares age-specific death counts from 1960 to 1997 in the DMF with official counts tabulated by the National Center for Health Statistics, the most authoritative source of death information for the U.S. population. Results suggest that for most years since 1973, 93 percent to 96 percent of deaths of individuals aged 65 or older were included in the DMF.

Social Security and Immigrant Earnings ^*

Immigrant cohorts have varied over time in many ways that have important implications for projecting the contributions immigrants make to the Social Security system. Using immigrant cohorts in the 1970, 1980, and 1990 decennial censuses, we find that immigrant men experience faster earnings growth than native-born men and that there has been a large increase over time in immigrant earnings growth rates. Thus, recent reductions in immigrant entry earnings are significantly compensated for by faster immigrant earnings growth.

Social Security Benefit Reporting in the Survey of Income and Program Participation and in Social Security Administrative Records ^*

The quality of Social Security benefit reporting in household surveys is important for policy research on the Social Security program and, more generally, for research on the economic well-being of the aged and disabled populations. This is particularly true for the aged among whom receipt of Social Security benefits is nearly universal and reliance on such benefits is considerable. This paper examines the consistency between Social Security benefit amounts for May 1990 as reported in the Survey of Income and Program Participation and given in the Social Security Administration's administrative records for the respondent.

Social Security Disability Programs: Assessing the Variation in Allowance Rates ^*

Social Security Privatization in Latin America

The new, partially privatized social security system adopted by Chile in 1981 has since been implemented, with some variations, in a number of Latin American and old-world transition economies with either a single- or multi-tier system. That alternative to a pay-as-you-go system is sometimes advocated as a desirable model for solving problems in developed systems, such as that of the United States. This article describes the new programs in Latin America, their background, and similarities and differences among them.

Social Security Reform in Central and Eastern Europe: Variations on a Latin American Theme

The Latin American model of social security reform with individual accounts has been adopted by a number of Central and Eastern European countries. That alternative to a pay-as-you-go system is sometimes advocated as a desirable model for solving problems in developed systems such as that of the United States. This article describes the Central and Eastern European systems and compares them with the Latin American systems.

Social Security: A Financial Appraisal for the Median Voter

Calculations of the median voter's return from "investing" in Social Security suggest that for a majority of voters the U.S. Social Security system provides higher ex-post, or actual, returns than alternative assets.

Social Security's Special Minimum Benefit

Some Social Security reform proposals, such as two of the three offered by the President's Commission to Strengthen Social Security, would modify and strengthen Social Security's special minimum benefit provision, which is intended to enhance benefits for low earners and is phasing out under current law. In order to inform policymakers as they continue to deliberate the provision's future, this article presents the most recent and comprehensive history and analysis available about the special minimum benefit.

SSA's Estimates of Administrative Costs Under a Centralized Program of Individual Accounts

Over the past several years, a number of policymakers have proposed creating national individual accounts (IAs) for retirement whose assets would be individually owned and directed among investment options. Some proposals would create an IA program outside Social Security; others would integrate IAs into the Social Security program itself. All IA proposals, however, would entail administrative functions, costs, and considerations. Identifying and recognizing those administrative elements are important steps in assessing the desirability, feasibility, and optimal design of IAs.

This paper summarizes the administrative operation of Social Security today; provides SSA's estimated administrative costs for two hypothetical IA programs (that is, only the costs that SSA could experience, not those that employers, other agencies, and other parties could incur); and highlights major considerations raised by IA administrative costs and choices.

SSI at Its 25th Year

Beginning in January 1974, the three previously existing state adult assistance programs were amalgamated into the Supplemental Security Income (SSI) program, to be administered by the Social Security Administration. This change was made to provide a nationwide floor of income for needs-based assistance and to make such payments more efficiently by working through SSA's existing network of field ofices.

This article traces the 25-year patterns of growth and changes in the number of persons applying for assistance, the number and proportion of applicants who were awarded payments, and the overall number of persons who received SSI. Three major age groups are considered separately: those aged 65 or older, disabled adults aged 18-64, and children age 18 and younger. The last group was newly eligible under SSI for payments based on their own blindness or disability and not, as was the case previously, because they were a member of a needy family.

SSI Eligibility and Participation Among the Oldest Old: Evidence from the AHEAD

This article models Supplemental Security Income (SSI) eligibility and participation among persons aged 70 or older using data from the Study of Assets and Health Dynamics Among the Oldest Old. An econometric model estimates the influence of socioeconomic characteristics on the probability of SSI participation among eligible units. Finally, a policy simulation is conducted by increasing the unearned income disregard from $20 to $125.

SSI Recipients in Households and Families with Multiple Recipients: Prevalence and Poverty Outcomes

This article provides new estimates of the prevalence of households with two or more unmarried recipients of SSI and analyzes the poverty status of three groups: individual recipients, married couple recipients, and two or more noncouple recipients living in the same household. It finds that outcomes are sensitive to assumptions regarding economies of scale for individual and married couple recipients. SSI program rules concerning the federal income guarantee for married couples versus individuals contributes to higher poverty rates among married couple recipients than among noncouple recipients living in the same household. The rate of poverty is highest among individual beneficiaries living alone. These findings are not sensitive to alternative ways to measure poverty.

State and Local Pension Plans' Equity Holdings and Returns

This article examines the recent trends in the size and performance of the equity investments of state and local pension plans. It also provides a context for the discussion about investing some portion of the Social Security trust fund reserves in private equities.

Stochastic Models of the Social Security Trust Funds

Stochastic Models of the Social Security Trust Funds

The 2003 Trustees Report on the Old-Age and Survivors Insurance and Disability Insurance Trust Funds contains, for the first time, results from a stochastic model of the combined trust funds of the OASDI programs. To help interpret the new stochastic results and place them in context, the Social Security Administration's Office of Policy arranged for three external modeling groups to produce alternative stochastic results. This article demonstrates that the stochastic models deliver broadly consistent results even though they use significantly different approaches and assumptions. However, the results also demonstrate that the variation in trust fund outcomes differs as the approach and assumptions are varied.

A Structural Model of Social Security's Disability Determination Process ^*

We estimate a multistage sequential logit model reflecting the structure of the disability determination process of the Social Security Administration (SSA), as implemented by state Disability Determination Services (DDS) agencies. The model is estimated using household survey information exactly matched to SSA records on disability adjudications from 1989 to 1993. Information on health, activity limitations, demographic traits, and work is taken from the 1990 Survey of Income and Program Participation. We also use information on occupational characteristics from the Directory of Occupational Titles, DDS workload pressure, and local area economic conditions from unpublished SSA sources. Under the program provisions, different criteria dictate the outcomes at different steps of the determination process. We find that without the multistage structural approach, the effects of many of the important health, disability, and vocational factors are not readily discernible. As a result, the split-sample predictions of overall allowance rates from the sequential model performed considerably better than the conventional approach based on a simple allowed/denied logit regression.

Executive Summary from—Survey Estimates of Wealth: A Comparative Analysis and Review of the Survey of Income and Program Participation

Transitions from AFDC to SSI before Welfare Reform

This article examines the interaction between the Supplemental Security Income (SSI) and Aid to Families with Dependent Children (AFDC) programs in the period before welfare reform (1990 to 1996). It also discusses the potential impact of welfare reform on the interaction between SSI and the Temporary Assistance for Needy Families program, which replaced AFDC.

Treatment of Married Couples in the SSI Program

The Supplemental Security Income program serves as an income source of last resort for elderly or disabled individuals. This analysis identifies how marital status affects benefit rates and the counting of income and resources in determining eligibility.

Trends in the Economic Status of the Elderly, 1976-2000

The elderly (persons aged 65 or older) are financially better off than ever before. Overall, poverty rates for the elderly have fallen since 1976, median real income has risen, and median income relative to that of the working-age population has been relatively stable. One factor in these improvements is increases in Social Security benefits that generally pay enough to keep independently living elderly persons out of poverty. Most demographic subgroups have shared the reduction in poverty rates. By all measures, however, the economic status of elderly Hispanics has not improved.

The U.S. Study of Work Incapacity and Reintegration

The International Social Security Association recently completed a six-nation comparative study of work incapacity and reintegration that focused on workers with back disorders. This article discusses the findings of the U.S. national study and discusses their policy implications.

The Upper Part of the Earnings Distribution in the United States: How Has It Changed?

This article examines the upper part of the earnings distribution for the period 1982-1995 using Social Security Administration data. The study shows that the earnings share of persons in the top 0.1 percent of the earnings distribution grew much faster over that period than did the share of those in any other part of the distribution.

Use of Social Security Administration Data for Research Purposes

Using Data for Couples to Project the Distributional Effects of Changes in Social Security Policy

This article addresses the importance of using data for couples rather than individuals to estimate Social Security benefits. We show how individual data can underestimate actual Social Security benefits, particularly for women, and discuss how its use has implications for policy evaluation.

Variation of Employee Benefit Costs by Age

How much an employer pays for employee benefits varies widely and depends on the age of the workforce and the structure of the benefits package offered. In general, costs increase for older workforces. The factors driving the differences in cost by age are the time value of money, employee pay, and rates of health care use, disability, and death. Case studies show how the benefit package varies by age in a large traditional company, a large financial services company, and a medium-sized retail company. An illustration is also provided for retirement benefits from two sample plans to show how the benefits are earned over time.

What Determines 401(k) Participation and Contributions?

In addition to variables such as age, income, and job tenure, the length of an employee's planning horizon is a crucial factor affecting participation in and contribution to a 401(k) plan. On the plan side, the most important factors are the availability of matching contributions from the employer and the ability of employees to gain access to their funds before retirement through borrowing. Good information about the need for retirement savings and good plan design could significantly increase eligible employees' participation and contributions.

What Stock Market Returns to Expect for the Future?

High stock prices, together with projected slow economic growth, are not consistent with the 7.0 percent return that the Office of the Chief Actuary has generally used when evaluating proposals with stock investments. Routes out of the inconsistency include assuming higher GDP growth, a lower long-run stock return, or a lower short-run stock return with a 7.0 percent return on a lower base thereafter. In short, either the stock market is overvalued and requires a correction to justify a 7.0 percent return thereafter, or it is correctly valued and the long-run return is substantially lower than 7.0 percent (or some combination of the two). This article argues that the former view is more convincing, since accepting the "correctly valued" hypothesis implies an implausibily small equity premium.

Who Is "62 Enough": Identifying Eligibles for Social Security Early Retirement in the Health and Retirement Study ^*

Either the normal retirement age (NRA) or the earliest eligibility age (EEA) for Social Security retirement benefits would be increased under many proposals for Social Security reform. As a consequence, research interest in who retires at early ages and the potential effects of an increase in the NRA or EEA has grown. This note discusses how well researchers can do using data from the Health and Retirement Study in identifying the pool of respondents who could have received early Social Security retirement benefits.

Who Is "62 Enough"? Identifying Respondents Eligible for Social Security Early Retirement Benefits in the Health and Retirement Study

Workers are not instantly eligible for Social Security retirement benefits on their 62nd birthdays, nor can they receive benefits in the month they turn 62. This note discusses how well researchers can do using data from the Health and Retirement Study (HRS) to identify respondents old enough to receive and report early Social Security retirement benefits. It shows that only some workers aged 62 at the time of an HRS interview will be "62 enough" to have received a Social Security benefit and reported it in the survey.

The Widow(er)'s Limit Provision

The widow(er)'s limit provision of Social Security establishes caps on the benefit amounts of widow(er)s whose deceased spouse filed for early retirement benefits. Currently, 33 percent of Social Security's 8.1 million widow(er) beneficiaries have lower benefits because of that provision. This paper describes the widow(er)'s limit provision and evaluates proposed changes to it. The proposals considered range from the modest (allowing widow(er)s to receive adjustments to the capped amounts by delaying receipt of benefits) to the substantial (abolishing the widow(er)'s limit).

The Widow(er)'s Limit Provision of Social Security

The widow(er)'s limit provision of Social Security establishes caps on the benefit amounts of widow(er)s whose deceased spouse filed for early retirement benefits. Currently, 33 percent of Social Security's 8.1 million widow(er) beneficiaries have lower benefits because of that provision. This article describes the widow(er)'s limit provision and evaluates options for changing it.

Widows Waiting to Wed? (Re)Marriage and Economic Incentives in Social Security Widow Benefits

In this paper we focus on an age restriction for remarriage in the Social Security system to determine if individuals respond to economic incentives for marriage. Aged widow(er) benefits are paid by the federal government to persons whose deceased spouses worked in Social Security covered employment. A widow(er) is eligible to receive benefits if she or he is at lease age 60. If a widow(er) remarries before age 60, she or he forfeits the benefit and, therefore, faces a marriage penalty. Under current law, there is no penalty if the remarriage occurs at 60 years of age or later. The Social Security rules on remarriage have changed over time. Only since 1979 have widow(er)s been allow to marry at or after age 60 and not face reductions in benefit amounts.

We investigate whether the age-60 remarriage rule affects the timing of marriage and whether the elimination of the marriage penalty in 1979 encouraged widows 60 or older to marry. For this study, we primarily use Vital Statistics data from the National Center for Health Statistics.

Our major findings are as follows. In 1979, there was an increase in the marriage rate of widows 60 or older. This suggests many widows in this age group chose not to marry until the marriage penalty they faced was removed. Also, in the post-1979 period, there was a drop in marriage rates immediately prior to age 60 and an increase after this age. We do not observe this pattern in the period before 1979, and we do not observe it for divorced women, who generally are not subject to the age-60 remarriage rule. These findings suggest that the age-60 remarriage rule affects the timing of marriage and has the most influence on women who are very close to age 60.