Social Security and the Evolution of Elderly Poverty

45 Pages Posted: 19 May 2004 Last revised: 8 Aug 2010

See all articles by Gary V. Engelhardt

Gary V. Engelhardt

Syracuse University - Center for Policy Research; Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Jonathan Gruber

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: May 2004

Abstract

We use data from the March 1968-2001 Current Population Surveys to document the evolution of elderly poverty over this time period, and to assess the causal role of the Social Security program in reducing poverty rates. We develop an instrumental variable approach that relies on the large increase in benefits for birth cohorts from 1885 through 1916, and the subsequent decline and flattening of real benefits growth due to the Social Securing 'notch', to estimate of Social Security on elderly poverty. Our findings suggest that over all elderly families the elasticity of poverty to benefits is roughly unitary. This suggests that reductions in Social Security benefits would significantly alter the poverty of the elderly.

Suggested Citation

Engelhardt, Gary V. and Gruber, Jonathan, Social Security and the Evolution of Elderly Poverty (May 2004). NBER Working Paper No. w10466, Available at SSRN: https://ssrn.com/abstract=541683

Gary V. Engelhardt

Syracuse University - Center for Policy Research ( email )

426 Eggers Hall
Syracuse, NY 13244
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Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Jonathan Gruber (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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HOME PAGE: http://web.mit.edu/gruberj/www/

National Bureau of Economic Research (NBER)

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