Notes on Social Security Reform

How Would Joe Biden Reform Social Security and Supplemental Security Income?

noreply@blogger.com (Andrew G. Biggs) — Mon, 19 Oct 2020 21:09:00 +0000

How Would Joe Biden Reform Social Security and Supplemental Security Income?

By Karen E. Smith, Richard W. Johnson and Melissa M. Favreault of the Urban Institute

October 8, 2020

Abstract

Joe Biden has proposed increasing Social Security revenue, enhancing Social Security benefits, and expanding Supplemental Security Income, a program that provides cash benefits to low-income older adults and people with disabilities. Our projections show that his proposals would lift more than 1 million people out of poverty in 2021 and cut the poverty rate for adult Social Security beneficiaries over the coming decades by more than half. We project that by extending the Social Security payroll tax to earnings above $400,000, his plan would close about a quarter of the program’s long-term funding deficit and extend the life of the trust funds by about five years.

Tomorrow! The Savings and Retirement Foundation, featuring Andrew Biggs

noreply@blogger.com (Andrew G. Biggs) — Tue, 08 Sep 2020 19:30:00 +0000

The Savings and Retirement Foundation

Join us Wednesday, 9 September

For a Zoom Talk by

Andrew Biggs

Senior Fellow at AEI

When he will speak about his new paper

How do Children Affect the Need to Save for Retirement?
Via Zoom

12:00 pm

RSVP

via

Zoom

Andrew G. Biggs is a resident scholar at the American Enterprise Institute, where he studies Social Security reform, state and local government pensions, and public sector pay and benefits. Biggs was previously the principal deputy commissioner of the Social Security Administration.

Weaver: SSI awards for the disabled lowest in 20 years

noreply@blogger.com (Andrew G. Biggs) — Mon, 31 Aug 2020 15:37:00 +0000

My former SSA colleague David Weaver writes in The Hill that benefit awards for Supplemental Security Income (SSI), a means-tested benefit for the blind, disabled and aged, have dropped significantly during the Covid recession

In May, June, and July of this year, SSA awarded 5,038, 4,572, and 5,122 elderly individuals SSI benefits, respectively. The June award figure is the smallest number of monthly awards for the elderly in the last 20 years. The May and July figures are the second and third smallest in the last 20 years. Further, the total number of awards in these three months is 42 percent lower than the number of awards to the elderly for the comparable 3-month period in 2019.

You can check out his whole column here.

New issue of the Journal of Pension Economics & Finance

noreply@blogger.com (Andrew G. Biggs) — Fri, 19 Jun 2020 17:19:00 +0000

Journal of Pension Economics & Finance
Volume 19 / Issue 3, July 2020
Published Online June 2020

Employment and substitution effects of raising the statutory retirement age in France
Simon Rabaté, Julie Rochut

Public pension wealth and household asset holdings: new evidence from Belgium
Mathieu Lefebvre, Sergio Perelman

Supporting decision-making in retirement planning: Do diagrams on Pension Benefit Statements help?
Féidhlim P. McGowan, Peter D. Lunn

On the effect of financial education on financial literacy: evidence from a sample of college students
Agar Brugiavini, Danilo Cavapozzi, Mario Padula, Yuri Pettinicchi

What determines financial literacy in Japan?
Yoshihiko Kadoya, Mostafa Saidur Rahim Khan

The implication of the hyperbolic discount model for the annuitisation decisions
Anran Chen, Steven Haberman, Stephen Thomas

Determinants of second pillar pension reforms: economic crisis and globalization
Joelle H. Fong, Markus Leibrecht

Systematic longevity risk: to bear or to insure?
Ling-Ni Boon, Marie Brière, Bas J. M. Werker

Policy Paper/Brief

Why are US men retiring later?
Wenliang Hou, Alicia Munnell, Geoffrey Todd Sanzenbacher, Yinji Li

Brenton Smith: “Is the Social Security Trust Fund Real"?”

noreply@blogger.com (Andrew G. Biggs) — Fri, 22 May 2020 16:14:00 +0000

Writing for FedSmith: check it out here.

The Social Security Trust Fund has been around for 80 years. Over that time, its role within the program has changed, but the argument has remained the same. Is the Trust Fund real or simply an accounting ledger where wonks play with imaginary cash?

It has lingered for decades because there is no right or wrong answer to the question of whether the Trust Fund is real. It is a theoretical question where different assumptions lead to opposite conclusions.

New paper from the NBER: “Social Security Wealth, Inequality, and Lifecycle Saving”

noreply@blogger.com (Andrew G. Biggs) — Tue, 12 May 2020 17:01:00 +0000

Social Security Wealth, Inequality, and Lifecycle Saving
John Sabelhaus and Alice Henriques Volz #27110

Abstract:

Wealth inequality in the US is high and rising, but Social Security is generally not considered in those wealth measures. Social Security Wealth (SSW) is the present value of future benefits that an individual will receive less the present value of future taxes they will pay. When an individual enters the labor force, they generally face a lifetime of taxes to pay before they will receive any benefits, and thus their initial SSW is generally low or negative. As an individual works and pays into the system their SSW grows and generally peaks somewhere around typical Social Security benefit claim ages. The accrual of SSW over the working life is most important for lower-income workers because the progressive Social Security benefit formula means that taxes paid while working are associated with proportionally higher benefits in retirement. We estimate SSW for individuals in the Survey of Consumer Finances (SCF) for 1995 through 2016 and use a pseudo-panel approach to empirically demonstrate those lifecycle patterns. We also show that including SSW in a comprehensive wealth measure generally reduces estimated levels of wealth inequality but does not reverse the upward trend in top wealth shares.

Social Security’s Financial Outlook: The 2020 Update in Perspective

noreply@blogger.com (Andrew G. Biggs) — Fri, 01 May 2020 15:46:00 +0000

by Alicia H. Munnell, Center for Retirement Research at Boston College

IB#20-7

The brief’s key findings are:

The 2020 Trustees Report, which was prepared before the pandemic, shows:
- Social Security’s 75-year deficit increased from 2.78 percent to 3.21 percent of payroll.
- Trust fund depletion remains at 2035, after which payroll taxes still cover about three quarters of promised benefits.
This shortfall is manageable, and the pandemic is unlikely to fundamentally alter the long-term financial status of the program.
Today’s crisis has also underscored the importance of Social Security, which continues to provide a steady source of income to millions of Americans.
Therefore, once the crisis subsides, stabilizing Social Security’s long-term finances should be a high priority to ensure that Americans have full confidence in its future

DOWNLOAD FULL BRIEF

2020 Social Security Trustees Report Released

noreply@blogger.com (Andrew G. Biggs) — Wed, 22 Apr 2020 17:55:00 +0000

The Social Security Trustees released their 2020 annual report on the program’s current and future financial health.

The projected date of trust fund insolvency remains unchanged at 2035. However, the long-term 75-year actuarial deficit rose significantly, from 2.78 to 3.21 percent of taxable wages. The reason for this 15 percent increase in the long-term funding shortfall is legislative changes related to the Affordable Care Act’s “Cadillac tax” on generous health care plans along with changes to both economic and demographic assumptions.

Weaver: “Congress should refurbish an old Social Security benefit in next stimulus”

noreply@blogger.com (Andrew G. Biggs) — Mon, 20 Apr 2020 18:01:00 +0000

My former Social Security Administration colleague and co-author David Weaver has an interesting op-ed in The Hill that looks at expanding Social Security’s death benefit.

In a typical year, about 2.8 million Americans die. The ultimate effect on mortality of the current public health emergency is unknown, with estimates of 60,000 deaths ultimately occurring. Death is certainly an unpleasant topic, but the country can take some comfort in its well-developed social insurance programs which provide income to survivors. Most Americans likely know that Social Security pays monthly benefits to aged widows and widowers — but many people may be unaware the Social Security program also supports minor and disabled children, widowed mothers and fathers, disabled widows and widowers, and even some elderly parents upon the death of a worker.

Almost all Social Security benefits are monthly benefits, but there is an exception: the lump sum death benefit (LSDB).

This is an old feature of Social Security, having been put into place with the original Social Security Act in 1935. Over time, the one-time benefit came to be viewed by many policymakers as a way of acknowledging the higher expenses a widow faced due to a spouse’s final illness and funeral. This little-known benefit from the Social Security program may be due for some refurbishing. The reason? The benefit is only $255.

You can check out the whole piece here.

New paper: “Does Student Loan Forgiveness Drive Disability Application?”

noreply@blogger.com (Andrew G. Biggs) — Mon, 16 Mar 2020 15:21:00 +0000

Does Student Loan Forgiveness Drive Disability Application?

Philip Armour, Melanie A. Zaber

NBER Working Paper No. 26787
Issued in February 2020
NBER Program(s):Public Economics

Student loan debt in the US exceeds $1.3 trillion, and unlike credit card and medical debt, typically cannot be discharged through bankruptcy. Moreover, this debt has been increasing: the share of borrowers leaving school with more than $50,000 of federal student debt increased from 2 percent in 1992 to 17 percent in 2014. However, federal student loan debt discharge is available for disabled individuals through the Department of Education's Total and Permanent Disability Discharge (TPDD) mechanism through certification of a total and permanent disability. In July 2013, the TPDD expanded to include receipt of Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) as an eligible category for discharge, provided medical improvement was not expected. Using data from the Survey of Income and Program Participation (SIPP) matched to SSI and SSDI applications, we find that SSDI and SSI application rates increased among respondents with student loans relative to rates among those without student loans. Our estimates suggest the policy change raised the probability of applying for SSDI or SSI in a given quarter among student loan-holders by 50% (baseline rate per quarter is approximately 0.3%), generally increasing SSI and SSDI awards. However, these induced award recipients were unlikely to receive the disability designation necessary to obtain student loan discharge. Given that the geographic distributions of student loan indebtedness and historical SSDI/SSI program participation differ, there are strong implications for both the size and location of SSDI and SSI beneficiaries. Furthermore, these findings highlight the importance of learning from policy changes in programs that interact with SSDI and SSI to better understand the drivers of disability program participation.

(2308 K)

New paper: “The Employment Effects of the Social Security Earnings Test”

noreply@blogger.com (Andrew G. Biggs) — Mon, 27 Jan 2020 16:26:00 +0000

The Employment Effects of the Social Security Earnings Test

Alexander M. Gelber, Damon Jones, Daniel W. Sacks, Jae Song

NBER Working Paper No. 26696
Issued in January 2020
NBER Program(s):Program on the Economics of Aging, Labor Studies Program, Public Economics Program

We investigate the impact of the Social Security Annual Earnings Test (AET) on the employment decisions of older Americans. The AET reduces Social Security benefits by one dollar for every two dollars earned above the exempt amount. Using a differences-in-differences design, we find that the employment rate of those predicted to become subject to the AET decreases substantially relative to those not predicted to become subject to it. The point estimates suggest that the AET reduces the employment rate of Americans aged 63-64 by at least 1.2 percentage points.

(1463 K)

Savings and Retirement Forum February 4 with the CBO’s Nadia Karamcheva

noreply@blogger.com (Andrew G. Biggs) — Mon, 27 Jan 2020 16:23:00 +0000

Join us the afternoon of February 4

For a Lunch Meeting with Guest Speaker:

Nadia Karamcheva

Economist

Congressional Budget Office

Who will discuss her paper:

The Relationship Between
Household Debt and Retirement Timing

Noon-1:00 p.m.
Tuesday, February 4th, 2020

Click to RSVP

Location: Tax Foundation
1325 G St NW

(Lunch will be provided)

Nadia Karamcheva is an economist at the Congressional Budget Office (CBO) in Washington DC. Prior to joining CBO, she worked as a research associate at the Urban Institute. She has a Ph.D. in Economics from Boston College and a B.A. in Economics and Business Administration from the American University in Bulgaria.

CBO’s Long-Term Social Security Projections: Changes Since 2018 and Comparisons With the Social Security Trustees’ Projections

noreply@blogger.com (Andrew G. Biggs) — Thu, 02 Jan 2020 21:27:00 +0000

In June 2019, CBO updated its long-term budget projections, including projections of the Social Security system’s finances. CBO compares those projections with its 2018 projections and with the Social Security trustees’ latest projections.

View Document

Social Security Bulletin, Vol. 79, No. 4

noreply@blogger.com (Andrew G. Biggs) — Fri, 08 Nov 2019 19:14:00 +0000

Released November 2019.

The Use of Longitudinal Data on Social Security Program Knowledge

by Laith Alattar, Matt Messel, David Rogofsky, and Mark A. Sarney

This article presents and compares results from the first two waves of Understanding America Study (UAS) surveys of public knowledge about Social Security programs. The article briefly reviews the Social Security Administration's past efforts to gauge public knowledge of the programs, describes the UAS survey instrument used in the current effort, and presents survey results with detail by respondent age, education, and financial literacy level. Among the authors' findings are that younger workers with lower levels of education and financial literacy are logical targets for agency informational outreach and interventions.

Hispanics' Knowledge of Social Security: New Evidence

by Janice Peterson, Barbara A. Smith, and Qi Guan

Although Hispanics rely more on Social Security benefits for retirement income than other population groups, their knowledge about the programs is shallower. The authors of this article use data from a large Internet survey panel to identify gaps in Social Security knowledge between Hispanics and non-Hispanic whites and among Hispanics across ancestry and primary-language groups and test the statistical significance of their findings. The results offer insights for further research and guidance for policy that aims to promote retirement security for U.S. Hispanics.

The Comprehensive Wealth of Older Immigrants and Natives

by David Love and Lucie Schmidt

This article compares the retirement preparations of immigrant and native-born Americans aged 51 or older. The authors estimate the present value of future income streams in calculating measures of comprehensive wealth and an annualized equivalent. In addition to some significant differences in median annualized wealth between immigrants and natives, the authors find that the most recent waves of immigrants are more financially vulnerable in retirement than earlier immigration cohorts were at similar ages. With a decomposition analysis, the authors estimate how much of the immigrant-native wealth gap is attributable to differences in observable characteristics.

New working papers from the Center for Retirement Research

noreply@blogger.com (Andrew G. Biggs) — Wed, 30 Oct 2019 21:49:00 +0000

The Center for Retirement Research at Boston College has recently released five working papers:

How Best to Annuitize Defined Contribution Assets?
Alicia H. Munnell, Gal Wettstein, and Wenliang Hou
How Do Older Workers Use Nontraditional Jobs?
Alicia H. Munnell, Geoffrey T. Sanzenbacher, and Abigail N. Walters
Will More Workers Have Nontraditional Jobs as Globalization and Automation Spread?
Matthew S. Rutledge, Gal Wettstein, and Sara Ellen King
Do States Adjust Medicaid Enrollment in Response to Capitation Rates? Evidence from the Medicare Part D Clawback
Laura D. Quinby and Gal Wettstein
The Effect of Medicare Part D on Evergreening, Generic Entry, and Drug Prices
Geoffrey T. Sanzenbacher and Gal Wettstein

New paper: “Promoting Economic Growth through Social Security Reform”

noreply@blogger.com (Andrew G. Biggs) — Fri, 20 Sep 2019 19:29:00 +0000

From Marc Goldwein, Maya MacGuineas and Chris Towner of the Committee for a Responsible Federal Budget.

Here’s the summary, but you can read the full paper here.

Summary of Recommendations for Pro-Growth Social Security Reform

Recommendation #1: Increase the Retirement Ages while Insulating Vulnerable Workers with an Age 62 Poverty Protection Benefit (62-PPB). One way to increase the size of the economy is to promote work among older Americans. Workers today face mixed retirement signals that often draw them into early retirement and treat retirement itself as a binary choice. To encourage longer and more flexible working lives, we propose phasing in an increase to Social Security’s early and normal retirement ages and then indexing them to growth in life expectancy. Understanding that many workers are unable to continue to work, we also propose offering all workers a 62-PPB benefit designed to insulate low-income workers from the financial effects of the age increases and ensure that anyone can retire at 62 without slipping into poverty.

Recommendation #2: Calculate Benefits Based on Each Year of Work Rather than Lifetime 35-Year Average Earnings. Higher labor force participation among workers of all ages can help to strengthen the economy. Yet the current Social Security benefit formula imposes a significant implicit tax on those who work less than ten years and on workers later in their careers – especially after 35 years of work. To reward each year of work, we propose counting every year of earnings toward Social Security benefits and applying Social Security’s benefit formula to annual, rather than average, earnings through a formula known as “mini-PIA.”

Recommendation #3: Automatically Enroll Workers into a “Supplemental Retirement Account” (SRA) on top of Social Security, with the Choice to Opt Out. Increasing the national savings rate would boost overall investment, increasing capital stock and economic growth. Unfortunately, many workers lack access to retirement savings vehicles, or are saving too little for retirement. To increase savings and investment, we recommend enrolling workers into add-on SRAs and automatically contributing 2 to 3 percent of their wages unless a worker chooses to discontinue contributions. SRAs could be invested into one of several well-diversified, low-fee funds and would be owned by the worker, who could access the funds upon retirement.

Recommendation #4: Make Social Security Sustainably Solvent Through a Combination of Progressive Tax and Benefit Changes. Reducing federal borrowing can promote economic growth by reducing “crowd out” of private investment, while improving policy certainty can significantly improve saving and investment choices. Unfortunately, Social Security is running large and rising deficits, which increase federal debt and leave the program on course to exhaust its trust fund reserves by 2035. To make the program sustainably solvent, we suggest a package of progressive revenue and benefit adjustments that would protect low-income seniors, phase in gradually, and ultimately bring the program’s costs and revenues in line. We also suggest that the precise composition of this package be decided as part of a political negotiation.

We also suggest lawmakers consider other pro-growth reforms – as part of and to supplement Social Security reform – in order to maximize potential growth effects.

Social Security Advisory Board announces meeting to review the 2019 Technical Panel final report

noreply@blogger.com (Andrew G. Biggs) — Tue, 17 Sep 2019 15:23:00 +0000

On Friday, September 27^ththe Social Security Advisory Board ("Board") will host a public meeting to review the 2019 Technical Panel on Assumptions and Methods' ("Technical Panel") report to the Board. The Board convened the independent, expert panel to review the assumptions and methods used to develop the annual report of the Social Security Trustees on the financial status of the Old-Age, Survivors, and Disability Insurance trust funds. The 2019 Technical Panel is the sixth quadrennial panel the Board has commissioned since 1999.

The 2019 Technical Panel is comprised of experts in the fields of demography, economics and actuarial science. The report reflects solely the views of the Technical Panel. The Board convened the Technical Panel, as well as past panels, in the hope that the work provides an important service to the public—an outside and expert review of the methods used to project Social Security financing.

The meeting will be held from 10:30 AM – 12:30 PM in Room 215, Dirksen Senate Office Building at 50 Constitution Avenue NE, Washington, DC 20002. Please email events@ssab.gov to RSVP if you plan to attend. The report will be available in electronic format only and will be posted on the Board’s website at least 48 hours in advance of the meeting.

Read the full announcement

Savings and Retirement Foundation with Guest Sandy Mackenzie

noreply@blogger.com (Andrew G. Biggs) — Mon, 16 Sep 2019 15:24:00 +0000

Savings and Retirement Foundation

For a Lunch Meeting with Guest Speaker:

Sandy Mackenzie,

Founding editor

Journal of Retirement

September 24th, 2019

Noon-1:00 p.m.

RSVP

The Tax Foundation

1325 G Street NW

Washington DC

Sandy Mackenzie is the founding editor of the Journal of Retirement and an experienced economic consultant and editor with a demonstrated history of working in non-profits, editorial supervision and economic policy, with an emphasis on fiscal policy. He has substantial experience with nonprofit organizations and skilled in the economics and finances of retirement, lecturing on fiscal, monetary and retirement issues, writing, and policy analysis. He holds a Master of Philosophy in Economics from Oxford University.

CBO’s 2019 Long-Term Projections for Social Security: Additional Information

noreply@blogger.com (Andrew G. Biggs) — Thu, 12 Sep 2019 20:36:00 +0000

In lieu of publishing a separate report providing additional information about CBO’s long-term projections for Social Security, the agency is publishing the data that it would have presented in that report.

View Document

Social Security Bulletin, Vol. 79, No. 3

noreply@blogger.com (Andrew G. Biggs) — Thu, 29 Aug 2019 15:29:00 +0000

Released August 2019.

Download entire publication

The Social Security Windfall Elimination Provision: Issues and Replacement Alternatives

by Glenn R. Springstead

The Windfall Elimination Provision (WEP) reduces the Social Security benefits of individuals who would otherwise receive a full benefit based on earnings in Social Security–covered employment as well as pension income from noncovered employment. Since the WEP was established in 1983, critics have asserted that it overcorrects the would-be windfall for affected beneficiaries and is difficult to administer. This article considers two WEP replacement options that would modify the benefit calculation methodology. It compares the current WEP with the two options and discusses some of the possible effects of changing the current law.

Social Security Disability Insurance and Supplemental Security Income Beneficiaries with Multiple Impairments

by Elisa Walker and Emily Roessel

This article uses data from the Social Security Administration's National Beneficiary Survey and agency administrative records to estimate the number and examine the characteristics of adult disability-program beneficiaries with multiple impairments. In the survey, most beneficiaries report conditions in more than one impairment category. Beneficiaries with multiple impairments tend to have more activity limitations and poorer health than those reporting one impairment. They also tend to be older and to have higher household incomes than those with one impairment, and are less likely to have work-related goals and expectations. Administrative data contain fewer impairments per beneficiary and do not necessarily reflect the condition(s)that the beneficiary considers most limiting. Administrative data are complete for their purpose, but they may underrepresent the totality of disability that beneficiaries experience, and thus may be less predictive of employment and other outcomes than survey data.

The Time Between Disability Onset and Application for Benefits: How Variation among Disabled Workers May Inform Early Intervention Policies

by Matt Messel and Alexander Strand

This article examines how much time typically passes between disability onset and application for disability-program benefits, by age at onset and diagnosis. Among eventual applicants, certain subgroups might be suitable targets for employment-support interventions. Using Social Security administrative data, the authors find that the median period from onset to application is 7.6 months. Younger applicants tend to have waited longer, particularly those diagnosed with back impairments or arthritis. Among both younger and older applicants, individuals diagnosed with intellectual disability or other mental disorders are potential targets for early intervention programs because those groups wait the longest to apply and are the most likely to continue working in the interim.

New paper: “The Effects of Differential Income Replacement and Mortality on U.S. Social Security Redistribution”

noreply@blogger.com (Andrew G. Biggs) — Tue, 27 Aug 2019 23:53:00 +0000

The Effects of Differential Income Replacement and Mortality on U.S. Social Security Redistribution

By Li Tan and Cory Koedel

PDF:

WP 17-01

WORKING PAPER NUMBER:

ABSTRACT:

We study redistribution via the United States Social Security retirement system for cohorts of men born during the second half of the 20th century. Our focus is on redistribution across race and education groups. The cohorts we study are younger than cohorts studied in previous, similar research and thus more exposed to recent increases in earnings inequality. All else equal, this should increase the degree of progressivity of Social Security redistribution due to the structure of the benefit formula. However, we find that redistribution is only modestly progressive for individuals born as late as 1980. Differential mortality rates across race and education groups are the primary explanation. While black-white mortality gaps have narrowed some in recent years, they remain large and dull progressivity. Mortality gaps by education level are also large and unlike the gaps by race, they are widening, which puts additional regressive pressure on Social Security redistribution.

New paper from the NBER: “Using Vignettes to Improve Understanding of Social Security and Annuities”

noreply@blogger.com (Andrew G. Biggs) — Tue, 27 Aug 2019 17:51:00 +0000

Using Vignettes to Improve Understanding of Social Security and Annuities

By Anya Samek, Arie Kapteyn, and Andre Gray #26176

Abstract:
Evidence shows that people have difficulty understanding complex aspects of retirement planning, which leads them to under-utilize annuities and claim Social Security benefits earlier than is optimal. To target this problem, we developed vignettes about the consequences of different annuitization and claiming decisions. We evaluated our vignettes using an experiment with a representative online panel of nearly 2,000 Americans. In our experiment, respondents were either assigned to a control group with no vignette, to a written vignette, or to a video vignette. They were then asked to give advice to hypothetical persons on annuitization or Social Security claiming, and were asked factual questions about these concepts. We found evidence that being exposed to vignettes led respondents to give better advice. For example, the gap between advised claim age for a relatively healthy person versus a relatively sick person was larger by nearly a year in the vignette treatments versus! the control group. Further, the vignettes increased financial literacy related to these concepts by 10-15 percentage points. Interestingly, the mode of communication did not have a significant impact – the video and written vignettes were equally effective.

New papers from the American Economic Journal

noreply@blogger.com (Andrew G. Biggs) — Tue, 30 Jul 2019 15:30:00 +0000

Life-Cycle Consumption Patterns at Older Ages in the United States and the United Kingdom: Can Medical Expenditures Explain the Difference?

James Banks, Richard Blundell, Peter Levell and James P. Smith

This paper documents significantly steeper declines in nondurable expenditures at older ages in the United Kingdom compared to the United States, in spite of income paths being similar. Several possible causes are explored, including different employment paths, housing ownership and expenses, levels and paths of health status, number of household members, and out-of-pocket medical expenditures. Among all the potential explanations considered, those relating to health care—differences in levels and age paths in medical expenses and medical expenditure risk—can fully account for the steeper declines in nondurable consumption in the United Kingdom compared to the United States.

Full-Text Access | Supplementary Materials

Estimating the Value of Public Insurance Using Complementary Private Insurance

Marika Cabral and Mark R. Cullen

The welfare associated with public insurance is often difficult to quantify because the demand for coverage is unobserved and thus cannot be used to analyze welfare. However, in many settings, individuals can purchase private insurance to supplement public coverage. This paper outlines an approach to use data and variation from private complementary insurance to quantify welfare associated with counterfactuals related to compulsory public insurance. We then apply this approach using administrative data on disability insurance. Our findings suggest that public disability insurance generates substantial surplus for the sample population, and there may be gains to increasing the generosity of coverage.

Full-Text Access | Supplementary Materials

Upcoming event: “African American Economic Security and the Role of Social Security”

noreply@blogger.com (Andrew G. Biggs) — Mon, 08 Jul 2019 16:13:00 +0000

Urban Institute Events

African American Economic Security
and the Role of Social Security

Wednesday, July 24, 2019, 9:00 a.m. to 11:00 a.m.
Registration and breakfast available at 8:30 a.m.

Urban Institute
500 L'Enfant Plaza SW
Washington, DC 20024

Social Security has evolved to become an integral part of the economic security of African American families, but this was not always the case. At its inception, Social Security did not cover domestic or agricultural work, in addition to other occupations, in which two-thirds of African Americans were employed. Changes to the program over subsequent decades have made it nearly universal. But racial and gender discrimination persists in the labor market and results in higher levels of unemployment, occupational segregation, and lower wages for African Americans, especially African American women. These structural barriers preclude many African American workers from jobs with pension coverage and sufficient income to save for retirement. And these labor market disparities result in Social Security benefit levels that leave a disproportionate share of African Americans in poverty.
The Urban Institute and the Center on Budget and Public Policy Priorities will release a brief that addresses these issues, and invite you to an event where participants will discuss the following:

Social Security’s history and the reasons domestic and farm workers initially were not covered
structural barriers that affect the employment and health outcomes of African American workers and result in greater use of disability and survivors insurance and lower Social Security benefits, despite the program’s progressive benefit formula
proposals to reform Social Security and their projected effects on African American families’ economic well-being

REGISTER HERE

Registration is required to attend the event.

Speakers:

Nancy Altman, President, Social Security Works
Kilolo Kijakazi, Institute Fellow, Urban Institute
Maya Rockeymore Cummings, President, Global Policy Solutions
Margery Turner, Senior Vice President for Program Planning and Management, Urban Institute
Sarah Rosen Wartell, President, Urban Institute
Kathleen Romig, Senior Policy Analyst, Center on Budget and Policy Priorities (moderator)

Upcoming webinar: “Spending Patterns of Older Households and Their Financial Planning Implications”

noreply@blogger.com (Andrew G. Biggs) — Wed, 03 Jul 2019 15:20:00 +0000

Please join EBRI for a webinar reviewing findings from its latest research on spending behavior of older Americans. EBRI researcher Zahra Ebrahimi will examine how spending varies by retirement status, wealth, and demographic characteristics. We will then hear from Sharon Carson, Retirement Strategist, Executive Director at J.P. Morgan Asset Management, to understand the implications of these findings in assessing retirement income adequacy for financial planning purposes.

Details

Date: July 24, 2019
Time: 2:00 p.m. – 3:00 p.m. Eastern Time

If you are interested in sponsoring this webinar or a series of webinars, please contact Betsy Jaffe.

Mark Your Calendar

Zahra Ebrahimi, Research Associate, EBRI

Sharon Carson, Executive Director, J.P. Morgan Asset Management, Retirement Team

Moderated by: Lori Lucas, CFA, President and CEO, EBRI

Only EBRI brings together unique and unbiased research, industry thought leaders and all segments of the employee benefits industry to provide unparalleled programming.