Academic journal article Social Security Bulletin

A Benefit of One's Own: Older Women's Entitlement to Social Security Retirement

Academic journal article Social Security Bulletin

A Benefit of One's Own: Older Women's Entitlement to Social Security Retirement

Article excerpt


This article explores differences in Social Security eligibility and benefit levels for older men and women using survey data from the Health and Retirement Study combined with administrative records on actual work histories and Social Security rules. We are able to determine the fully insured status of those persons, how close they are to meeting eligibility criteria when they are not fully insured, and their prospects for benefits.

Around three-quarters of older women nearing retirement today will be fully insured for Social Security old-age benefits on the basis of their own accounts, but the rest would need substantial extra employment to rise above the eligibility threshold. Further, two-thirds of older married women who are fully insured have sufficient lifetime earnings to translate into an age-65 primary insurance amount worth at least half their husband's, but the other onethird can expect no additional retirement benefit from contributing to Social Security late in life. Finally, most wives will not be able to improve their benefits by working more under current rules.

These results have mixed implications regarding the potential impact of women's rising labor force attachment on eventual retirement benefits. Working more years could increase women's chances of becoming eligible for Social Security benefits, but that effect is likely to be small. Furthermore, even when women do become fully insured according to the rules, not many wives will receive a higher benefit at the margin. The reason is that married women still receive higher Social Security benefits as a spouse than they do on the basis of their own work record. In fact, the net benefit from Social Security due to additional work is negative once one takes into account the Social Security contributions the women paid while employed. Benefits paid to widows are even more likely to be based on the spouse's work history rather than on the woman's. Hence, the rising labor market attachment of women in the future may increase their eligibility for benefits but will produce only modest (and often negative) impacts on their old-age Social Security benefits under current rules.


Some charge that the Social Security system treats men and women inequitably (GAO 1997; Briceland-Betts 1997), while others contend that older women are "Social Security's number-one beneficiaries" (Smeeding, Estes, and Glasse, no date). The rules governing Social Security eligibility and benefit amounts are sex-neutral, but in practice men are more likely to be eligible for benefits (because of their longer work histories) and entitled to higher benefits (because of their higher lifetime earnings). Work-life differences also play a role in marital benefits under the program: husbands are more likely than wives to qualify for their own benefit and, therefore, to receive that benefit rather than a spousal benefit; and among nonmarried persons, differences in average pay levels and years of work account for virtually all of the gap between men and women in Social Security benefits (Levine, Mitchell, and Phillips 1999).

This study analyzes whether longer periods of work and rising levels of pay for women might shrink those differences in the future. This topic is worthy of economic analysis because the complexity of the Social Security program's eligibility and benefit rules makes it difficult to predict how changes in the labor market might influence future benefit patterns for aging Americans. Previous analyses explored the effect of changes in average differences in work histories on future Social Security benefits. However, little is known about the effect of distributional differences in work histories. The present study extends the literature in that direction.

This article:

Reviews briefly the key features of Social Security affecting eligibility and benefit levels,

Documents differences in eligibility and average projected Social Security benefits between men and women, along with the work and pay differentials contributing to the gap, and

Examines distributional differences in labor market behavior that may portend more equal benefit amounts for men and women. …

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