RISING INELIGIBILITY FOR SOCIAL SECURITY: DRIVERS AND CONSEQUENCES OF ELDERLY POVERTY

Abstract

Social Security is a bedrock anti-poverty program that provides crucial support to millions of low-income, older Americans. Despite its importance, Social Security is not a universal entitlement but an insurance program that determines eligibility based on life-time earnings in the formal labor market. In recent years, an increasing population of seniors have reached retirement age without qualifying for benefits. I argue the rise in ineligibility is an example of policy drift where Social Security has remained static while a range of socio-economic dislocations have undermined the ability of individuals to qualify. First, I estimate the consequences of incarceration for Social Security eligibility. I draw on a set of administrative data from the state of Wisconsin to evaluate the probability that formerly incarcerated individuals qualify for Social Security using a blend of survival analysis and causal identification strategies. I find that one in four individuals who experienced incarceration will not qualify for Social Security and there are substantial racial disparities in this risk. Second, I investigate a set of interconnected social dislocations that undermined the transition to adulthood for many young urban women. I rely on data from the NLSY-79 to estimate the probability of qualification based on a range of exposures using survival analyses. Coming of age amid high unemployment, childhood poverty, welfare receipt, and the presence of children are notable risk factors for exclusion. Third, I evaluate the probability that seniors without access to Social Security experience material hardships in their finances, nutrition, health care, and housing. I analyze data from the Health and Retirement Study to compare senior’s sources of retirement income to their reported experiences of hardships. I find seniors without Social Security are much more likely to experience hardship across a range of domains, individually and simultaneously. I synthesize these results into a portrait of Social Security’s emerging weakness in reaching America’s most vulnerable seniors.