How Work & Marriage Trends Affect Social Security’s Family Benefits

Social Security aims to provide retirees a basic oldage income after a lifetime of work. Monthly benefits were designed to replace a greater share of the earnings of low-wage workers, who spend a greater share of their income on necessities than high-wage workers. Social Security likewise includes spousal and survivor benefits. These “family benefits” were designed for the standard family unit when the program was created in the 1930s – a married couple in which the husband was the breadwinner and the wife a homemaker. The family unit today has changed dramatically in two important ways relevant to spousal and survivor benefit design. First, most married women have significant wage employment and earn Social Security benefits on their own earnings record. Second, many women have children but never marry, and divorce rates are high among those who do marry. This brief reviews studies by the Social Security Administration’s Retirement Research Consortium that assess the implications of these changing work and marriage patterns on Social Security’s effectiveness in providing families a basic old-age income. The discussion proceeds as follows. The first section provides a primer on Social Security spousal and survivor benefits. The second section reviews the erosion of these benefits due to the increased employment of married women. The third section discusses how changing marital patterns have increased the share of families not covered by Social Security’s family benefits, potentially leaving them with insufficient incomes in retirement. The fourth section assesses two family benefit alternatives – earnings sharing and caregiving credits – that could boost retirement incomes for divorced and never-married mothers. The final section concludes that the structure of family benefits could be enhanced to improve the retirement security of today’s families.