Social Security and the Evolution of Elderly Poverty
We use data from the March 1968-2001 Current Population Surveys to document the evolution of elderly poverty over this time period, and to assess the causal role of the Social Security program in reducing poverty rates. We develop an instrumental variable approach that relies on the large increase in benefits for birth cohorts from 1885 through 1916, and the subsequent decline and flattening of real benefits growth due to the Social Securing 'notch', to estimate of Social Security on elderly poverty. Our findings suggest that over all elderly families the elasticity of poverty to benefits is roughly unitary. This suggests that reductions in Social Security benefits would significantly alter the poverty of the elderly.
|Date of creation:||May 2004|
|Date of revision:|
|Publication status:||published as Auerbach, Alan, David Card and John Quigley (eds.) Public Policy and the Income Distribution. New York: Russell Sage Foundation, 2006.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Krueger, Alan B & Pischke, Jorn-Steffen, 1992.
"The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation,"
Journal of Labor Economics,
University of Chicago Press, vol. 10(4), pages 412-37, October.
- Alan B. Krueger & Jorn-Steffen Pischke, 1991. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," NBER Working Papers 3699, National Bureau of Economic Research, Inc.
- Sawhill, Isabel V, 1988. "Poverty in the U.S.: Why Is It So Persistent?," Journal of Economic Literature, American Economic Association, vol. 26(3), pages 1073-119, September.
- Stephen E. Snyder & William N. Evans, 2002. "The Impact of Income on Mortality: Evidence from the Social Security Notch," NBER Working Papers 9197, National Bureau of Economic Research, Inc.
- Martin Feldstein & Jeffrey B. Liebman, 2001.
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
- Timothy M. Smeeding, 1986. "Nonmoney income and the elderly: The case of the tweeners," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 5(4), pages 707-724.
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