IDEAS home Printed from https://ideas.repec.org/p/hhs/hastec/2017_001.html
   My bibliography  Save this paper

It Sucks to Be Single! Marital Status and Redistribution of Social Security

Author

Listed:
  • Groneck, Max

    () (Dept. of Economics)

  • Wallenius, Johanna

    () (Dept. of Economics)

Abstract

In this paper, we study the labor supply effects and the redistributional consequences of the U.S. social security system. We focus particularly on auxiliary benefits, where eligibility is linked to marital status. To this end, we develop a dynamic, structural life cycle model of singles and couples, featuring uncertain marital status and survival. We account for the socio-economic gradients to both marriage stability and life expectancy. We find that auxiliary benefits have a large depressing effect on married women's employment. Moreover, we show that a revenue neutral minimum benefit scheme would moderately reduce inequality relative to the current U.S. system.

Suggested Citation

  • Groneck, Max & Wallenius, Johanna, 2017. "It Sucks to Be Single! Marital Status and Redistribution of Social Security," SSE Working Paper Series in Economics 2017:1, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastec:2017_001
    as

    Download full text from publisher

    File URL: http://swopec.hhs.se/hastec/papers/hastec2017_001.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 395-427.
    2. Shinichi Nishiyama, 2010. "The Joint Labor Supply Decision of Married Couples and the Social Security Pension System," Working Papers wp229, University of Michigan, Michigan Retirement Research Center.
    3. Richard Blundell & Monica Costa Dias & Costas Meghir & Jonathan Shaw, 2016. "Female Labor Supply, Human Capital, and Welfare Reform," Econometrica, Econometric Society, vol. 84, pages 1705-1753, September.
    4. Nezih Guner & Remzi Kaygusuz & Gustavo Ventura, 2014. "Income Taxation of U.S. Households: Facts and Parametric Estimates," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 559-581, October.
    5. Larry E. JONES & Rodolfo E. MANUELLI & Ellen R. McGRATTAN, 2015. "Why Are Married Women Working so much ?," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(1), pages 75-114, March.
    6. Kaygusuz, Remzi, 2015. "Social security and two-earner households," Journal of Economic Dynamics and Control, Elsevier, vol. 59(C), pages 163-178.
    7. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1346-1434, December.
    8. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-1552, September.
    9. Betsey Stevenson & Justin Wolfers, 2007. "Marriage and Divorce: Changes and their Driving Forces," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 27-52, Spring.
    10. Kjetil Storesletten & Chris I. Telmer & Amir Yaron, 2004. "Cyclical Dynamics in Idiosyncratic Labor Market Risk," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 695-717, June.
    11. Terry, Stephen J. & Knotek II, Edward S., 2011. "Markov-chain approximations of vector autoregressions: Application of general multivariate-normal integration techniques," Economics Letters, Elsevier, vol. 110(1), pages 4-6, January.
    12. repec:aph:ajpbhl:1995:85:7:949-956_1 is not listed on IDEAS
    13. Alessandra Voena, 2015. "Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," American Economic Review, American Economic Association, vol. 105(8), pages 2295-2332, August.
    14. Susumu Imai & Michael P. Keane, 2004. "Intertemporal Labor Supply and Human Capital Accumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 601-641, May.
    15. Weiss, Yoram & Willis, Robert J, 1997. "Match Quality, New Information, and Marital Dissolution," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 293-329, January.
    16. Chakraborty, Indraneel & Holter, Hans A. & Stepanchuk, Serhiy, 2015. "Marriage stability, taxation and aggregate labor supply in the U.S. vs. Europe," Journal of Monetary Economics, Elsevier, vol. 72(C), pages 1-20.
    17. Dillender Marcus, 2016. "Social Security and Divorce," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(2), pages 931-971, April.
    18. Nadia S. Karamcheva & April Yanyuan Wu & Alicia H. Munnell, 2015. "Does Social Security Continue to Favor Couples?," Working Papers, Center for Retirement Research at Boston College wp2015-11, Center for Retirement Research.
    19. Nezih Guner & Remzi Kaygusuz & Gustavo Ventura, 2014. "Income Taxation of U.S. Households: Facts and Parametric Estimates," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 559-581, October.
    20. Imrohoroglu, Ayse & Imrohoroglu, Selahattin & Joines, Douglas H, 1995. "A Life Cycle Analysis of Social Security," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(1), pages 83-114, June.
    21. Adam Isen & Betsey Stevenson, 2010. "Women's Education and Family Behavior: Trends in Marriage, Divorce and Fertility," NBER Chapters,in: Demography and the Economy, pages 107-140 National Bureau of Economic Research, Inc.
    22. Johanna Wallenius, 2011. "Human Capital Accumulation and the Intertemporal Elasticity of Substitution of Labor: How Large is the Bias?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(4), pages 577-591, October.
    23. Juan C. Conesa & Dirk Krueger, 1999. "Social Security Reform with Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(4), pages 757-795, October.
    24. Stacy Dickert-Conlin & Cristian Meghea, 2004. "The Effect of Social Security on Divorce and Remarriage Behavior," Working Papers, Center for Retirement Research at Boston College wp2004-9, Center for Retirement Research, revised Apr 2004.
    25. April Yanyuan Wu & Nadia S. Karamcheva & Alicia H. Munnell & Patrick Purcell, 2013. "How Do the Changing Labor Supply Behavior and Marriage Patterns of Women Affect Social Security Replacement Rates?," Working Papers, Center for Retirement Research at Boston College wp2013-16, Center for Retirement Research.
    26. Raquel Fernández & Joyce C. Wong, 2014. "Divorce Risk, Wages, and Working Wives: A Quantitative Life-Cycle Analysis of Female Labor Force Participation," NBER Working Papers 19869, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Borella, Margherita & De Nardi, Mariacristina & Yang, Fang, 2017. "Marriage-related policies in an estimated life-cycle model of households' labor supply and savings for two cohorts," CEPR Discussion Papers 12390, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Social Security; Spousal and Survivor Benefits; Marital Risk; Female Labor Supply; Redistribution;

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:hastec:2017_001. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helena Lundin). General contact details of provider: http://edirc.repec.org/data/dehhsse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.