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Guaranteed Income: SSI and the Well-Being of the Elderly Poor

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  • Kathleen McGarry

Abstract

Discussions of changes in the Social Security program must necessarily consider the impact of such changes on the well-being of the poor elderly. Under the current system, the financial needs of this population are met by the Supplement Security Income program (SSI). SSI has done much to improve situation of the poorest elderly but has the potential to do more. This paper examines that potential. One of the most surprising aspect of the program is that many of those eligible for benefits are not enrolled. Here I examine the correlates of participation for a sample of eligible individuals and use the results to simulate the effect of changes in eligibility criteria on participation and on costs. The largest expansion considered in the paper, providing an income guarantee for all elderly individuals that is equal to the poverty line, increases payments directed towards the elderly by 90 percent, to just over 8 billion in 1993 dollars. Although large, this $8 billion is less than half of the expenditures for the SSI disabled population in that year. Modifications to SSI that increase income disregards, eliminate the asset test, or base income eligibility solely on Social Security income, would be less costly, but would also provide less relief to the poor. Importantly, all programs, including the current system, could have substantially greater effects on poverty if participation rates were increased.

Suggested Citation

  • Kathleen McGarry, 2000. "Guaranteed Income: SSI and the Well-Being of the Elderly Poor," NBER Working Papers 7574, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7574
    Note: AG PE
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    References listed on IDEAS

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    1. Agneta Stark & Nancy Folbre & Lois Shaw & Timothy Smeeding & Susanna Sandstrom & Lois Shaw & Sunhwa Lee & Kyunghee Chung, 2005. "Poverty And Income Maintenance In Old Age: A Cross-National View Of Low Income Older Women / Growing Old In The Us: Gender And Income Adequacy / Gender And Aging In South Korea," Feminist Economics, Taylor & Francis Journals, vol. 11(2), pages 163-197.
    2. Deanna Sharpe, 2008. "Economic Status of Older Asians in the United States," Journal of Family and Economic Issues, Springer, vol. 29(4), pages 570-583, December.
    3. Kathleen McGarry & Robert F. Schoeni, 2015. "Understanding Participation in SSI," Working Papers wp319, University of Michigan, Michigan Retirement Research Center.
    4. Andreea Balan-Cohen, 2008. "Healthy, Wealthy, and Wise? The Impact of the Old Age Assistance Program on Elderly Mortality in the United States," Discussion Papers Series, Department of Economics, Tufts University 0719, Department of Economics, Tufts University.
    5. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
    6. Susanna Sandström & Timothy Smeeding, 2005. "Poverty and Income Maintenance in Old Age: A Cross-National View of Low Income Older Women," LIS Working papers 398, LIS Cross-National Data Center in Luxembourg.

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    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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