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How Progressive Is Social Security and Why? (Policy Briefs/Straight Talk on Social Security and Retirement Policy)
C. Eugene Steuerle, Adam Carasso, Lee Cohen

Social Security was designed to redistribute income from those with higher lifetime earnings to those with lower lifetime earnings. The reason is obvious: the system was created to ensure an adequate retirement income for the elderly. Less obvious is how Social Security's many provisions interact to achieve redistribution. This Straight Talk summarizes the most comprehensive study of those interactions to date, concluding that less-educated, lower-income, and nonwhite groups benefit little or not at all from redistribution in the old age and survivors insurance (OASI) part of Social Security. However, there is substantial redistribution to women, who historically have had lower lifetime earnings than men.

Posted to Web: May 01, 2004Publication Date: May 01, 2004

How Progressive Is Social Security When Old Age and Disability Insurance Are Treated as a Whole? (Policy Briefs/Straight Talk on Social Security and Retirement Policy)
C. Eugene Steuerle, Adam Carasso, Lee Cohen

This brief, building on the discussion of progressivity in Straight Talk 37, shows how including Disability Insurance (DI) restores very modest levels of progressivity to the Social Security system as a whole. That is, some lower lifetime earnings groups that fall victim to regressive trends under the Old-Age Survivors' Insurance program find their situation considerably improved or reversed when DI is added to the mix, in the form of higher internal rates of return on the benefits they receive over a lifetime. Generally, we find that black men, those earning in the bottom quintile, and those dropping out of high school have a greater chance of receiving DI than other groups.

Posted to Web: May 01, 2004Publication Date: May 01, 2004

Redistribution under OASDI: How Much and to Whom? (Article)
Lee Cohen, C. Eugene Steuerle, Adam Carasso

In one of the most comprehensive, intergenerational studies on Social Security's redistribution of lifetime income, the authors find that (1) Social Security, or Old Age, Survivors, and Disability Insurance (OASDI), is slightly progressive in that persons with high lifetime earnings on average receive lower rates of return than persons with low lifetime earnings; (2) For most generations, the retirement component (OASI) by itself achieves little if any redistribution across income groups, while Disability Insurance (DI) is progressive, it is a relatively small program, and so does not affect overall redistribution under OASDI, except for key groups; and (3) The groups who benefit most when DI is "added" to OASI are men, workers in the bottom earnings quintile, high school dropouts, and minorities. [ Brookings Institution]

Posted to Web: December 31, 2003Publication Date: December 31, 2003

The Effects of Disability Insurance on Redistribution Within Social Security By Gender, Education, Race and Income (Research Report)
Lee Cohen, C. Eugene Steuerle, Adam Carasso

In this paper, we assess the extent to which redistributive trends within Social Security are affected when the Old Age and Survivors Insurance (OASI) program is converted to an OASDI program through the addition of Disability Insurance (DI). Our analysis covers four cohorts spanning 1931-1964, using a preliminary version of the jointly developed Modeling Income in the Near Term (MINT) model, version 3. We present detailed measures of redistribution - before and after accounting for Disability Insurance - based on beneficiaries' "own," "received," and "shared" benefits and broken out by gender, race, educational attainment, and lifetime earnings quintile. We then use these measures to comment on the amount of redistribution and progressivity the DI program introduces into the system and the extent to which various groups do or do not benefit.

Posted to Web: June 11, 2002Publication Date: June 11, 2002

Social Security Redistribution by Education, Race, and Income: How Much and Why (Research Report)
Lee Cohen, C. Eugene Steuerle, Adam Carasso

Newly available data from Social Security's Modeling Income in the Near Term model, version 2, makes it possible to assess how much Social Security redistributes to various income, gender, racial, and educational cohorts. This redistribution is measured on the basis of the individual's own earnings history, the extent to which benefits are received (whether earned on one's own record or not), and on a shared concept under which taxes and benefits are shared when spouses are both alive. This paper examines findings from the model and discusses the extent to which the progressive rate structure in the benefit formula offsets or does not offset the impact of mortality on the extent of redistribution.

Posted to Web: May 17, 2001Publication Date: May 17, 2001


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