Long-Run Intergenerational Effects of Social Security

Both historically and today, support of aging parents has largely taken the form of in-kind transfers that require physical proximity, such as housing and caregiving. If Social Security substitutes for such support, it can relax constraints on where recipients' children live and work. We investigate the long-run intergenerational effects of the early Social Security program, exploiting within-occupation, cross-industry differences in coverage, and a new dataset linking parents to their children's later-life outcomes. We find that sons whose parents had greater predicted coverage moved farther from their childhood homes, earned more, and lived in better neighborhoods late in life. We find no such effects for daughters, who tended to provide forms of support less easily replaced by Social Security. The gains considerably exceeded the associated Social Security benefits for the average family, with migration to better-matched labor markets a likely key driver. We propose that the early program enabled families to realize gains from migration that were back-loaded, uncertain, and difficult to contract on.