Publications on Social Security

Increasing older people's employment rates could reduce the economic pressures of an aging population, and many older adults say they want to delay retirement. Yet, numerous public policies and private practices continue to encourage early retirement. The Urban Institute, with support from the Alfred P. Sloan Foundation, sponsored an October 2007 roundtable to examine the value of older adults' work. Researchers, practitioners, employers, and policymakers discussed the potential supply of and demand for older workers, the benefits of working longer, barriers to continued employment, and policy solutions to encourage work at older ages. This document summarizes the issues and discussion.

Growing fiscal pressures and increasing life expectancy have prompted calls to raise retirement ages. Some fear this change might harm long-career, lower-wage workers. Tying retirement benefit eligibility to years of service might protect low-wage workers who start their careers early. But higher disability rates and greater employment volatility could offset lower-wage workers’ early labor force starts. Using survey data matched to administrative records, we describe how work histories vary by gender, education, and other characteristics. We find that years of service are not likely to effectively protect the lowest-wage workers, as those with the least education also work the least.

Tax rates can affect decisions regarding work, investment in human capital, and wealth accumulation, each of which modulates intra- and intergenerational economic mobility. Similarly, government spending affects mobility either by purchasing goods that may drive mobility, such as education and health, or by effectively lowering the cost of mobility-enhancing goods through tax deductions and credits. This review summarizes the literature on the effects of government tax and spending policy on economic mobility, with a focus on the impacts of changes in marginal tax rates, the tax treatment of wealth, and government spending on health care, education, and Social Security. (Review 10 of 11.)

Government analysts portray a bleak fiscal future as the retirement of baby boomers and soaring health costs push up expenditures on Social Security, Medicare and Medicaid much faster than projected tax revenues. Some argue that the analysts' economic growth projections are too pessimistic. This analysis argues that official growth projections are quite reasonable, but even if they are too pessimistic, faster growth will accelerate Social Security costs because of the program's structure and health costs are also likely to grow more rapidly. Faster growth will, however, ease the pain associated with necessary reforms.

People think of retirement security as balancing on a three-legged stool, with income from assets, private pensions, and Social Security as the legs. However, despite growing awareness about the importance of saving for retirement, many elderly people cannot rely on their financial assets. According to data from the 2004 Health and Retirement Study, lower-income adults age 65 and older rely less on income from assets and traditional defined-benefit pensions than their higher-income counterparts. Instead, older adults with lower income rely primarily on Social Security and public transfers for their retirement security.