How Effective is Redistribution Under the Social Security Benefit Formula?

38 Pages Posted: 17 Jan 2008

See all articles by Alan L. Gustman

Alan L. Gustman

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography

Multiple version iconThere are 3 versions of this paper

Date Written: September 1, 2000

Abstract

This paper uses earnings histories from the Social Security Administration, linked to the survey responses for participants in the Health and Retirement Study, to investigate redistribution under the current social security benefit formula. As advertised, own benefits are significantly redistributed from individuals with high to those with low lifetime earnings. However, redistribution is roughly halved when spouse and survivor benefits are taken into account and redistribution is measured among families. When families are arrayed by total earnings during years when both spouses are engaged in substantial work, there is very little redistribution from families with high to low earnings capacity.

Suggested Citation

Gustman, Alan L. and Steinmeier, Thomas L., How Effective is Redistribution Under the Social Security Benefit Formula? (September 1, 2000). Michigan Retirement Research Center Research Paper No. WP 2000-005. Available at SSRN: https://ssrn.com/abstract=1084554 or http://dx.doi.org/10.2139/ssrn.1084554

Alan L. Gustman (Contact Author)

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Center
Hanover, NH 03755
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603-646-2641 (Phone)
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National Bureau of Economic Research (NBER)

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Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography ( email )

Lubbock, TX 79409-2101
United States
806-742-2201 (Phone)

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