Panel Paper: Differential Changes in Life Expectancy and Old Age and Survivor Benefits

Thursday, November 8, 2018
8226 - Lobby Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Kenneth Couch1, Gayle Reznik2, Christopher Tamborini2 and Howard Iams2, (1)University of Connecticut, (2)U.S. Social Security Administration

Making use of micro-simulations methods, this paper examines the relationship between changing life expectancies of American men and women across the distribution of lifetime earnings and lifetime receipt of Social Security Old Age and Survivor benefits. The analysis documents the relationship between longevity and lifetime benefit receipt across successive age cohorts. The micro-simulation model used in the analysis is Modeling Income in the Near Term (MINT), a sophisticated program that generates projections of many variables such as mortality, marriage, remarriage, labor market activity and other variables necessary to calculate future benefits within the SSA system. The primary outcomes examined in the analysis include simulated monthly and lifetime benefits along with other measures of economic well-being.
Another purpose of MINT is to simulate effects of potential changes in policy. Using the information generated in the first stage of the analysis regarding changing patterns of longevity across generations, potential methods for adjusting benefits in response to increased longevity and their effects are explored. In particular, the analysis considers adjusting benefits so that each person experiences gains (1) associated with the average increase in years of life expectancy for their specific age cohort or (2) gains associated with the proportional increase in longevity for their age cohort. The analysis is focused on understanding the demographic evolution of American society and its impact on Social Security benefit receipt and the possible consequences of policy proposals on economic well-being among Americans.