creator: Smeeding, Timothy M.
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Social Security Reform: Improving Benefit Adequacy and Economic Security for Women
description- – This Policy Brief is designed to raise awareness of the current and future economic circumstances of older women, and the ways in which Social Security reform can help alleviate their unmet needs. It considers the gaps in benefit adequacy and economic security that are not addressed by current Social Security reform proposals and then suggests a series of modest, low-cost reforms to help close these gaps. If our proposals are adopted, Social Security reform will not only close the long-run financial deficit, but it will also greatly reduce the future poverty status of older women, particularly those who live alone. This is an opportunity for progressive reform as well as for budgetary balance.The Social Security program was designed over 60 years ago for a world in which mothers worked at home, raised children, and were widowed young, but not divorced; where fathers worked in industrial settings; and where both men and women had much shorter life expectancies at older ages than those of succeeding generations. Back in 1935 the founders of Social Security did not anticipate that women would become the major beneficiaries of the program. Increasingly, women rely on Social Security as the major source of their economic security at older ages, much more so than do men. Therefore, women are the group with the most to gain or lose from reform of the Social Security system and modification of its benefit formulae.Future women beneficiaries will be different. Women's lives are changing rapidly in many ways. More women work outside the home today, and about half of all marriages end in divorce. Increasing numbers of children grow up in a single-parent family, typically that of the mother. The higher future benefits expected for women with their own careers in the labor market need to be balanced against the potentially bleak economic situation in old age for a large and growing number of divorced and never married women.
- – 1999-12-01
- – application/pdf
Patterns of Time Use of People Age 55 to 64 Years Old: Some Cross-National Comparisons
description- – This paper examines the patterns of time use of adults age 55 to 64 years old in six countries: Austria, Canada, Finland, Italy, Sweden, and the United States. It examines the discontinuity in daily activities by employment status and gender.The paper uses nationally representative samples from time use surveys carried out in each country. We compute aggregate patterns of time use by employment status and gender for seven categories of activities: personal activities, paid work, unpaid work, housework, social leisure, active leisure, and passive leisure. We also compute dissimilarity indices to measure the degree of discontinuity in patterns of time use by employment status and gender.We find that the pattern of time use of non-employed adults resemble that of full-time employed people on their non-workdays. We also find evidence that the transition out of the labor force is associated with a convergence in pattern of time use of men and women in the USA, Canada, and Finland, but not in other countries.There appears to be continuities in the way people use their time as they grow older and retire from the labor force. We however raise the possibility that these results may hold only for the 'young-old'. Decreasing health and physical endurance at older ages may introduce significant discontinuities in patterns of time at a later stage of the life-cycle. Our future work will examine the impact of health and daily limitation on patterns of time use at older ages.
- – 2000-12-01
- – application/pdf
Who Are the Poor Elderly? An Examination Using Alternative Poverty Measures
description- – According to most accounts the past decade has brought with it tremendous gains in reducing poverty among the elderly, i.e., those persons aged 65 or older. Although official poverty rate for children continues to be near the 20 percent level, the official poverty rate among the elderly fell to 10.5 percent in 1998. This rate is the lowest rate on record - less than half of the 1970 rate of 22.6 percent, and less than a third of the 33.1 percent rate found in 1959 (U.S. Census Bureau (1999), Table B-2). Health status and life expectancy among the elderly have increased over the past 40 years (Wolfe and Smeeding (1999)). Although pockets of poverty remain, for example, among older women living alone, and poverty rates of elderly in the United States exceed those in many other rich countries (Smeeding (1999a)), the overall picture is one of great progress. A continuation of these trends could imply that poverty among the elderly (as officially measured) might not be a major concern for policymakers as they consider Social Security reform. The official U.S. poverty rates for the elderly, however, have been severely criticized during the past few years because of the way poverty is measured and because of the implications for Social Security. These measurement issues might create different conclusions about the level and trend in elderly poverty.
- – 2000-12-01
- – application/pdf
The Senior Income Guarentee (SIG): A New Proposal to Reduce Poverty Among the Elderly
description- – Social Security reform is back near the top of the public agenda after a 15-year absence. The Bush administration seeks a partial privatization of Social Security, while avoiding new payroll taxes. The administration will almost certainly try to limit its agenda to the creation of an individual account system of some sort. But the debate will not necessarily be limited to that issue, nor should it. The narrowness of political margins in Congress, the absence of a strong electoral mandate for the president, and the widespread popularity of the current Old Age and Survivors Insurance (OASI) system suggest that if some type of plan for individual accounts is to be enacted, political and policy tradeoffs will have to be made to assemble a winning coalition. Supporters of the Bush administration and skeptics alike should be prepared with thoughtful proposals to improve the overall quality of the income retirement system in the United States, while offering the potential to facilitate agreement on a broader Social Security reform package.One of the key tradeoffs that such a reform package faces is the one between the benefit risks inherent in the transformation to a privatized system compared to a guaranteed level of benefit adequacy in old age. We address this tradeoff by proposing an effective and relatively inexpensive program to provide a minimally adequate floor to old age income through the Social Security system. This Senior Income Guarantee (SIG) provides a cost-effective method for reducing elder poverty to very low levels. Thus, it provides a counterbalance to the old age income risks inherent in a partially privatized Social Security system.
- – 2001-12-01
- – application/pdf
Income Maintenance in Old Age: What Can be Learned from Cross-National Comparisons
description- – The purpose of this paper is to review the recent evidence on the antipoverty effectiveness and other characteristics of income maintenance systems for the elderly in the rich nations of the world. As we move toward Social Security reform in the United States, we do so knowing that a comparatively high fraction of our older population experience, income poverty compared to their counterparts in other nations. Strategies to reduce the future Social Security deficit need to take into account the way that program changes affect poverty and benefit adequacy as well as fiscal soundness. Other nations offer approaches which would help us to achieve lower poverty rates while also providing fiscally responsible solutions to the future public costs of an aging society through reforms to the Social Security system.
- – 2001-05-01
- – application/pdf
The Retirement Consumption Conundrum: Evidence from a Consumption Survey
description- – While the life-cycle hypothesis predicts that consumption remains smooth during the transition from work into retirement, recent studies have shown that consumption declines at retirement. This empirical result has been referred to as the retirement consumption puzzle. Previous literature has most often relied on food expenditures to estimate the decline in consumption at retirement.We add to this literature by using broader definitions of consumption data from the Consumer Expenditure Survey (CEX), which is a survey designed to estimate total household expenditures. We conduct cohort analysis, using data on four cohorts over 20 years from 1984 to 2003. Our results using only food expenditures are on the lower end of the distribution of existing results. As we use broader measures of consumption, our results suggest that the retirement consumption conundrum decreases by more than half. Further, another contribution of this analysis is to widen the focus of the study of the well-being of the elderly. The retirement consumption puzzle does not tell the whole story on the well-being of the elderly. While we find that consumption-expenditures decrease by about 2.5 percent when individuals retire, expenditures continue to decline at about a rate of 1 percent per year after that.
- – 2005-12-01
- – Fisher, Johnathan
- – Johnson, David S.
- – Marchand, Joseph
- – Smeeding, Timothy M.
- – Torrey, Barbara Boyle
- – application/pdf
Cross-National Comparison of Income and Wealth Status in Retirement: First Results From the Luxembourg Wealth Study (LWS)
description- – This paper provides a first glance at the role of income and wealth in comparing economic security of older persons in the United States in cross-national perspective. We compare our elders to those in six other rich OECD countries (Canada, Finland, Germany, Italy, Sweden, and the United Kingdom). These countries have diverse social policy systems, with respect to both social insurance and public assistance; and they have very different patterns of private wealth holding. The paper is based on a new source of wealth micro data, known as the Luxembourg Wealth Study (LWS). In this paper, we first develop a comparable definition of wealth and net worth across nations and then focus our efforts on the inter-country variation in the composition of income and asset packages for those 65 and over, with respect to the main sources in each package. We examine the structure of income and wealth holdings and their joint distribution; income and asset poverty of the elderly; the importance of home ownership in providing security for the elderly; differences in wealth by education; and we provide an initial glimpse at wealth and income inequality in a comparative perspective. We conclude by comparing the risks associated with private assets to those associated with under-funded public pension systems.
- – 2007-02-01
- – application/pdf
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