Academic journal article Social Security Bulletin

Hispanics, Social Security, and Supplemental Security Income

Academic journal article Social Security Bulletin

Hispanics, Social Security, and Supplemental Security Income

Article excerpt

Summary

The U.S. Census Bureau reports that Hispanics are the country's largest and fastest growing minority, representing about 14.4 percent of the population in 2005 (Census Bureau 2006b). By 2050, Hispanics will account for an estimated 24.4 percent of the population-or 1 in every 4 persons in the United States (Census Bureau 2004, Table 1a). The Hispanic population tends to be younger than the overall population and currently represents a relatively small but growing fraction of the Social Security beneficiary population. The representation of Hispanics in the Supplemental Security Income (SSI) program, however, approximates that of their representation in the overall population.

This article compares the Hispanic population with the overall population along several dimensions, with a particular focus on the Social Security beneficiary and SSI recipient populations. Data are drawn mainly from the 2005 Public Use Microdata Sample of the American Community Survey (ACS PUMS), a relatively new data source with a rich set of economic and demographic variables. Fully implemented nationwide for the first time in 2005, the ACS became the largest household survey in the United States with a sample of almost 3 million addresses.

The analysis using the ACS finds that the Hispanic population is significantly different from the general population, particularly in the areas of age distribution, educational attainment, and economic well-being. Compared with the general population, the Hispanic segment is younger and is characterized by lower levels of educational attainment and a higher rate of poverty. The Hispanic Social Security beneficiary population also differs significantly from the general beneficiary population in the same areas. In contrast, the Hispanic and general SSI populations are more comparable with regard to age and economic status and differ significantly only with regard to education.

Introduction

Hispanics constitute an important, growing, and changing demographic subgroup of beneficiaries of the retirement, survivor, and disability programs under Social Security. Today, only about 6 percent of Social Security beneficiaries aged 62 or older are Hispanic, but according to projections by the Social Security Administration's MINT (Modeling Income in the Near Term) model that figure will exceed 15 percent by 2050.1 Hispanics tend to be younger than the overall population (Ramirez 2004, 4), and by 2050 they may represent an even larger fraction of younger beneficiaries (for example, those under age 62). The Hispanic beneficiary population is not only growing, but its composition is changing. As a result of immigration trends, future Hispanic beneficiary populations will probably reflect a smaller percentage of persons tracing their ancestry to the Caribbean and larger percentages with Mexican and Central American ancestry.2

Hispanics are also an important subgroup of Supplemental Security Income (SSI) recipients. SSI is a means-tested program for disabled and elderly persons who have limited income and assets. It is administered by the Social Security Administration (SSA) but is distinct from the Social Security program. Social Security is financed by payroll taxes and is paid to eligible persons who are lawfully residing in the United States. By contrast, the SSI program is financed by general funds of the U.S. Treasury and restricts payments to U.S. citizens and certain groups of qualified aliens. SSI is available to persons in the 50 states, the District of Columbia, and some U.S. territories but, importantly, not Puerto Rico. Most states provide a supplement to the federal benefit. Among persons aged 15 or older, Hispanics represent an estimated 13.0 percent of the SSI population. That figure matches the estimated percentage of Hispanics in the overall population in the same age group (13.0 percent).

The 2005 American Community Survey

Because Hispanics represent a growing subgroup of Social Security beneficiaries and a sizable fraction of SSI recipients, policymakers are showing a greater interest in their well-being. …

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