Academic journal article Social Security Bulletin

Elderly Poverty and Supplemental Security Income, 2002-2005

Academic journal article Social Security Bulletin

Elderly Poverty and Supplemental Security Income, 2002-2005

Article excerpt

The Supplemental Security Income (SSI) program is the nation's safety net for the aged, blind, and disabled. SSI receipt is often not reported by individuals interviewed in the Current Population Survey (CPS), the statistical base for the Census Bureau's annual estimates of poverty rates. In an earlier article, we explored the effect on estimated poverty rates in 2002 of adjusting CPS income reports using administrative data on earnings and benefits from the SSI and Old-Age, Survivors, and Disability Insurance programs. We assessed poverty using both the official standard and a "relative" standard based on half of median pretax, posttransfer income. This article extends that work through 2005. We find that including administrative data presents challenges, but under the methodology we adopt, such adjustments lower estimated official poverty overall and increase estimated poverty rates for elderly SSI recipients. Relative poverty rates are much higher than official poverty rates. By any of the applied standards and procedures for income adjustment, poverty changed little over the 2002-2005 interval.

Introduction

The Supplemental Security Income (SSI) program acts as a safety net by providing a minimum level of income to the aged, blind, and disabled. As of December 2008, approximately 7.5 million persons received SSI, of which 2 million (27 percent) were aged 65 or older (SSA 2009). This group of recipients is about 5 percent of America's senior citizens. Thus, SSI for the elderly is not a major factor in the social assistance landscape. Nevertheless, it does establish an income floor, and it offers an institutional framework for caring for older people who for some reason reach later life with few resources. Given recent economic developments, it is possible that SSI enrollment may grow. Thus, continuing review of SSI outcomes is valuable.

The success of programs like SSI in ensuring minimum incomes for Americans can be measured in various ways. Typically, leaders and researchers have evaluated persons' economic standing using the official Census poverty standard and data from the Current Population Survey's (CPS's) Annual Social and Economic Supplement (ASEC). The official poverty standard is commonly described as "absolute" because it is based on a family budget established in the 1960s and is fixed in real terms (Fisher 1992). In recent decades, the prevalence of poverty among elderly Americans as measured by the official standard has declined substantially. From 1966 through 2006, the poverty rate for persons aged 65 or older fell from 28.5 percent to 9.4 percent. In 1966, the elderly poverty rate exceeded that of adults aged 18-65 by 18 percentage points. By 1993, parity with the poverty rate of other adults was achieved; since that year, the elderly poverty rate has generally been over a percentage-point lower than that registered for adults of "working age" (DeNavas-Walt, Proctor, and Smith 2007, 50). However, it is difficult to trace the connection between SSI and poverty because receipt of SSI is substantially underreported in the CPS. For example, the estimated number of SSI recipients in 2002 derived from the CPS is about 30 percent lower than the count obtained from administrative data (Nicholas and Wiseman 2009, Table 8).

In a recent article, we addressed the underreporting issue by merging CPS/ASEC survey data for 2002 with administrative data on earnings and benefits from the SSI and Old-Age, Survivors, and Disability Insurance (OASDI) programs (Nicholas and Wiseman 2009). We encountered two major problems in this effort. First, for various reasons only about three-quarters of persons surveyed for the CPS could be matched to Social Security administrative records. Second, in a significant number of cases, income sources and amounts reported in the CPS do not match administrative records, although often the differences are slight. We developed two alternatives to address these problems. …

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