Distributive Effects of Social Security and Pension Benefits
As the public debates the danger of the increasing federal deficit, social security is once again receiving public attention. Should the government de-emphasize social security and emphasize employer-provided pensions as a vehicle for providing retirement income? Before policymakers face this question, it is important to evaluate the role of these programs in shaping the level and the distribution of income among the retired. This article presents findings from a study based on the 1982 New Beneficiary Survey. The study found that, compared with employer-provided pension benefits, social security benefits not only assure a relatively higher level of income to economically disadvantaged demographic groups of recent retirees but also are significantly more effective in equalizing income distribution among a recent cohort of retirees. Policy implications are drawn from the study's findings.
Distributive effects of benefits and taxes.
In light of the growing federal deficit, pressure is mounting to cut federal spending. If the budget for social security programs is cut, who will suffer? This article presents the results of a study that investigated the degree to which taxes and public income transfers change the level of income, the degree of inequality in income distribution, and the poverty rates of various demographic groups. Major findings are that public income transfers are more powerful than taxes in equalizing the income distribution and that poverty reduction through non-means-tested transfer programs is more effective among elderly people, white people, and people in married-couple families, whereas poverty reduction through means-tested transfer programs is more effective among nonelderly people, black people, and people in female-headed families. Implications for social work practice are discussed.
Social Security and the American Family
This paper presents the results of a computer simulation of the expected present value of benefits, taxes, and transfers, rates of return, and marginal linkage of benefits and taxes for persons of different income levels and family status. A number of important issues associated with the "deal" and incentives projected to be offered by the current social security system for different family situations are treated: married versus single persons, number of earners in the family and the division of earnings between them, and the special situation of widows and divorcees. The results show tremendous variation for different family situations and often dwarf amounts at stake for most families in the recent debates over income tax reform. We pay particular attention to items such as marriage penalties and subsidies, incentives to postpone divorce and low marginal linkage of expected benefits to incremental taxes paid by women, whether as second earners in a family, divorcees or widows.