How Might Earnings Patterns and Interactions Among Certain Provisions in OASDI Solvency Packages Affect Financing and Distributional Goals?

Research Report

How Might Earnings Patterns and Interactions Among Certain Provisions in OASDI Solvency Packages Affect Financing and Distributional Goals?

March 22, 2018

Abstract

When analysts compile Social Security packages based on projections of individual provisions’ effects, they may not fully appreciate how provisions might interact to alter intended outcomes, thwarting financing and distributional goals. We catalog potential interactions and use matched Survey of Income and Program Participation data to document work and benefit history patterns that shape how Social Security proposals could affect different groups. Using microsimulation, we show how selected parameter interactions affect distributional outcomes. Interactions can be significant, so packages are best evaluated holistically. The whole does not always equal the sum of its parts, either in cost or distributional terms.

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