The Effect of Heavy Drinking on Social Security Old-Age and Survivors Insurance Contributions and Benefits

TitleThe Effect of Heavy Drinking on Social Security Old-Age and Survivors Insurance Contributions and Benefits
Publication TypeJournal Article
Year of Publication2004
AuthorsOstermann, J, Sloan, FA
JournalThe Milbank Quarterly
Volume82
Issue3
Pagination507-46
KeywordsHealth Conditions and Status, Social Security
Abstract

Using data on persons aged 51 to 62 at wave 1 of the Health and Retirement Study and their spouses, linked Social Security earnings data for 1951 to 1991, and three other sources, we estimated the effects of heavy alcohol consumption on Social Security's Old Age and Survivor Insurance (OASI) contributions and benefits. The analysis accounted for differential earnings and mortality experiences of individuals with different alcohol consumption patterns, controlling for other characteristics including smoking. Relative to moderate drinking, heavy drinking imposes a net cost on drinkers in terms of reduced OASI benefits relative to their contributions. From the vantage point of OASI program finances, heavy drinking is advantageous. For each cohort of 25-year-olds, eliminating heavy drinking would cost the program an additional 3 billion (2000 dollars) over the cohort's lifetime. Public health campaigns aim to improve individual health-relevant behaviors and, in the long run, increase longevity. To the extent that public programs for the elderly are structured as longevity-independent defined benefit programs, such successes, while rewarding healthier behaviors, will also increase these programs' outlays and worsen their financial condition.

Notes

RDA 1996-024

Endnote Keywords

Alcohol Drinking/Social Security

Endnote ID

12382

Citation Key6925