Redistribution under OASDI

Research Report

Redistribution under OASDI

How Much and to Whom?

Abstract

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]

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