Panel Paper:
A Comparison of Alternative Approaches to Improving Benefit Adequacy in Disability and Retir
Thursday, November 8, 2018
8226 - Lobby Level (Marriott Wardman Park)
*Names in bold indicate Presenter
Efforts to alleviate poverty and near poverty among the aged and disabled are likely to be more effective if they recognize the different strengths of social assistance, social insurance, and tax systems. This study compares three stylized types of approaches for addressing need in old age and disability: Six different types of enhancements to the Supplemental Security Income (SSI) program, two Social Security changes, and a hybrid approach that operates through the tax system, akin to the earned income tax system but based on need, including adjustments for informal care work. Using a dynamic microsimulation model based on the Survey of Income and Program Participation that integrates data from a range of longitudinal household surveys, we compare how different types of proposals would target different types of beneficiaries. We focus on beneficiary groups that are most likely to be poor. We highlight how various proposal features can affect program costs and cost effectiveness.
Preliminary findings suggest that all the approaches direct most of their benefits to people with high economic needs. Among the SSI approaches, proposals to update the asset test targeted older adults with low incomes best. The Social Security options are sensitive to future choices about indexing. On many, but not all dimensions, the hybrid method was the most target efficient of the approaches, directing a very large share of benefits to those in highest need.
