Does Social Security Continue to Favor Couples?

TitleDoes Social Security Continue to Favor Couples?
Publication TypeReport
Year of Publication2015
AuthorsKaramcheva, NS, Wu, AYanyuan, Munnell, AH
Document NumberCRR WP 2015-11
Date Published06/2015
InstitutionCenter for Retirement Research at Boston College
CityChestnut Hills, MA
KeywordsDivorce, Marriage, Older Adults, Retirement Planning and Satisfaction, Social Security, Women and Minorities

While dramatic increases in women’s labor supply and earnings have led to a substantial decline in the fraction of women eligible for spouse benefits at retirement, most wives still receive a survivor benefit, as wives still typically have lower earnings than their husbands and live longer. Using the MINT microsimulation model and the HRS data linked with Social Security administrative earnings records, this paper examines the extent to which Social Security continues to favor couples and will do so in the future. The paper finds that while the OASI program still distributes lifetime income from singles to couples, the transfers appear to be shrinking over time. Nevertheless, couples are still projected to have a higher benefit/tax ratio, a lower median net tax rate, and a higher share of them will be receiving positive net transfers from the system as compared to those who are never married or divorced. The increased labor force participation and earnings of women have contributed significantly to the decline in redistribution from men to women, and from singles to couples, while the effect of declining marriage rates has only a modest effect.

Citation Key8648