Exploring the Social Security Benefit Implications of Same-Sex Marriage

Same-sex marriage became legal nationwide in the United States on June 26, 2015. Federal legalization of same-sex marriage expands the pool of individuals potentially eligible for spousal Social Security benefits to the estimated 4 percent of the population that is lesbian, gay, or bisexual. This paper is a foundational step toward better understanding the potential impact of the expansion of marriage rights to same-sex couples on Social Security. We primarily use data from the 2011-2015 American Community Survey to describe the economic circumstances of couple households. Building on this information, we find that same-sex couples tend to have higher household earnings than heterosexual couples, especially male couples. We estimate that same-sex couples have a smaller earnings gap (up to 4 percentage points) compared with heterosexuals. Intrahousehold division of labor explains 58 to 66 percent of the observed smaller earnings gaps in same-sex versus heterosexual couples. Same-sex married couples are less likely than heterosexuals to qualify for spousal SS benefits, but given that they are eligible, males can generally claim higher benefit amounts than heterosexuals (about $8,400 /year), while female couples could claim similar amounts to heterosexuals (about $7,200 /year). We project spousal benefit claims for same-sex couples 2017 to 2040, using standard demographic methods to estimate the gay and lesbian population by age and sex for this period. Finally, we collect new data that confirm the results obtained from the ACS, and provide insights about subjective expectations about marriage and labor supply prospects for this population. These can be used for future estimations.