View Research by Author - Joshua H. Goldwyn

Publications

Employment rates for single mothers with dependent children have been rising, partly because of welfare reform and expansions in the Earned Income Tax Credit. This paper examines this trend and implications for future retirement security. The results show that employment and earnings gains for single mothers during the late 1990s will translate into modestly higher Social Security benefits and better retirement outcomes when they reach later life, assuming these trends persist. However, most single mothers will fare worse in retirement than other women, primarily because they generally earned low wages over their lifetimes and many lack financial support from spouses.

Understanding the consumption needs of retirees is critical to assessing the adequacy of retirement income and the possible impact of Social Security reform on older Americans. This study uses data from the Health and Retirement Study, including a supplemental expenditure survey, to analyze spending patterns and consumption needs for adults ages 65 and older. Typical older married adults spend 84 percent of after-tax household income, and nonmarried adults spend 92 percent of after-tax income. Even at older ages individuals devote a larger share of expenditures and income to housing than any other category of goods and services, including health care.

This project explores distributional consequences of Plan 2 of the President's Commission to Strengthen Social Security using dynamic microsimulation. This plan includes: voluntary personal account "carve outs," minimum benefits, widow(er)s benefit increases, and initial benefit formula shifts (from wage- to price-indexing). The analysis develops a baseline using Office of the Chief Actuary assumptions regarding portfolio allocation, rates of return, administrative costs, and annuitization. We compare results with promised benefits and current-law adjusted to match costs of the baseline without accounts. We test the estimates' sensitivity to assumptions using historical data, values from the literature, and models estimated from SCF data.

Cutting cost-of-living adjustments (COLAs) is often proposed as a way to limit Social Security costs, which will soar as the nation ages. This brief shows, however, that even modest COLA reductions would lead to substantial cuts in family income for the oldest and poorest retirees. Trimming COLAs to one-half of a percentage point below the annual percentage change in the Consumer Price Index, for example, would reduce median Social Security benefits in 2040 by 13 percent for adults ages 85 and older, and would push an additional 2 million older adults onto the bottom rungs of the income distribution.

Retirees in traditional pension plans must generally choose between single life annuities, which provide regular payments until death, and joint and survivor annuities, which pay less each month but continue to make payments to the spouse after the death of the retired worker. This study examines the payout decision by married pensioners. The results indicate that 28 percent of married men and 69 percent of married women decline survivor protection. Men whose spouses have pension coverage from their own employers and men with small pensions and limited household wealth are more likely than other men to reject survivor protection.

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