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    CLARK, ROBERT L. HANSON, EMMA and MITCHELL, OLIVIA S. 2016. Lessons for public pensions from Utah's move to pension choice. Journal of Pension Economics and Finance, Vol. 15, Issue. 03, p. 285.

  • Journal of Pension Economics and Finance, Volume 12, Issue 1
  • January 2013, pp. 1-27

Redistribution under the Social Security benefit formula at the individual and household levels, 1992 and 2004*

  • DOI:
  • Published online: 09 July 2012

Studies using data from the early 1990s suggested that while the progressive Social Security benefit formula succeeded in redistributing benefits from individuals with high earnings to individuals with low earnings, it was much less successful in redistributing benefits from households with high earnings to households with low earnings. Wives often earned much less than their husbands. As a result, much of the redistribution at the individual level was effectively from high earning husbands to their own lower earning wives. In addition, spouse and survivor benefits accrue disproportionately to women from high income households. Both factors mitigate redistribution at the household level. It has been argued that with the increase in the labor force participation and earnings of women, Social Security now should do a better job of redistributing benefits at the household level. To be sure, when we compare outcomes for a cohort with a household member age 51 to 56 in 1992 with those from a cohort born twelve years later, redistribution at the household level has increased over time. Nevertheless, as of 2004 there still is substantially less redistribution of benefits from high to low earning households than from high to low earning individuals.

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This research was supported by a grant from the U.S. Social Security Administration (SSA) through the Michigan Retirement Research Center (MRRC) under grant number UM11-06. The findings and conclusions expressed are solely those of the authors and do not represent the views of SSA or the MRRC. David Olson of the Social Security Administration was extremely helpful to us in dealing with the ANYPIA program. We also thank Mike Hurd, Olivia Mitchell and participants at the MRRC workshop for their helpful comments.

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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Gopi Shah Goda , John B. Shoven and Sita Nataraj Slavov (2011). Differential mortality by income and social security progressivity. In David A. Wise (ed), Explorations in the Economics of Aging. Chicago: University of Chicago Press for NBER, pp. 189204.

Alan L. Gustman and Thomas L. Steinmeier (2001). How effective is redistribution under the social security benefit formula? Journal of Public Economics, 82(1): 128.

Jeffrey B. Liebman (2002). Redistribution in the current U.S. social security system. In Martin Feldstein and Jeffrey B. Liebman (eds). The Distributional Aspects of Social Security and Social Security Reform. Chicago: University of Chicago Press, pp. 1148.

Christopher R. Tamborini , Howard M. Iams and Kevin Whitman (2009). Marital history, race, and social security spouse and widow benefit eligibility in the United States. Research on Aging, 31(5): 577605.

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Journal of Pension Economics & Finance
  • ISSN: 1474-7472
  • EISSN: 1475-3022
  • URL: /core/journals/journal-of-pension-economics-and-finance
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