Skip to main content

Social security reforms and poverty among older dual-earner couples

Abstract

Existing retirement studies have, in the main, focused only on labor supply decisions of couples in which the husband has been the sole earner. This paper extends the focus of analysis to examine retirement among dual-earner couples. It further develops a framework for assessing how several past and prospective Social Security reforms might be expected to affect older working couples' retirement ages and retirement incomes.

Two questions are addressed in some detail: (1) What are the likely effects of various changes in Social Security rules on the retirement decisions of older working women and their husbands? and (2) How might these changes alter the incidence of poverty among retired dual-earner couples? Empirical evidence from the United States suggests that many benefit reforms currently being discussed in policy circles will enhance Social Security system revenues, but will also worsen the economic status of an important segment of dual-earner couples.

This is a preview of subscription content, access via your institution.

References

  • Aaron HJ, Bosworth BP, Burtless G (1989) Can America afford to grow old? Brookings Institution, Washington, DC

    Google Scholar 

  • Burkhauser RV, Quinn J (1980) Financial retirement incentives in private pension plans. Final Report to the US Department of Labor, Urban Institute

  • Burtless G, Moffitt R (1984) The effect of Social Security benefits on the labor supply of the aged. In: Aaron HJ, Burtless G (eds) Retirement and economic behavior. Brookings Institution, Washington, DC, pp 135–174

    Google Scholar 

  • Clark RL (1991) Retirement systems in Japan. Pension Research Council. Irwin, Homewood, IL

    Google Scholar 

  • Clark RL, McDermed AA (1982) Inflation, pension benefits, and retirement. J Risk Insurance 49:19–38

    Google Scholar 

  • Clark RL, Johnson T, McDermed AA (1980) Allocation of time and resources by married couples approaching retirement. Soc Security Bull 43:3–15

    Google Scholar 

  • Diamond PA, Hausman JA (1984) The retirement and unemployment behavior of older men. In: Aaron HJ, Burtless G (eds) Retirement and economic behavior. Brookings Institution, Washington, DC, pp 97–134

    Google Scholar 

  • Employee Benefit Research Institute (1987) International trends in Social Security reform. Issue Brief No. 68. Washington, DC

  • Employee Benefit Research Institute (1989) Japan copes with its honorable elders. Issue Brief No. 92. Washington, DC

  • Employee Benefit Research Institute (1990) International benefits: Part 2. Retirement income. Issue Brief No. 107. Washington, D.C.

  • Fields GS, Mitchell OS (1984a) The effects of Social Security reforms on retirement ages and retirement incomes. J. Public Econ 25:143–159

    Article  Google Scholar 

  • Fields GS, Mitchell OS (1984b)Retirement, pension and Social Security. MIT Press, Cambridge, MA

    Google Scholar 

  • Gustman A, Steinmeier T (1986) A structural retirement model. Econometrica 54:555–584

    Google Scholar 

  • Hanoch G, Honig M (1983) Retirement, wages, and labor supply of the elderly. J Labor Econ 1:131–151

    Article  Google Scholar 

  • Hausman J, Wise D (1985) Social Security, health status, and retirement. In: Wise DA (ed) Pensions, labor and individual choice. University of Chicago Press, Chicago, pp 159–191

    Google Scholar 

  • Henretta JC, O'Rand AM (1980) Labor force participation of older married women. Soc Security Bull 43:10–16

    Google Scholar 

  • Henretta JC, O'Rand AM (1983) Joint retirement in the dual worker family. Soc Forces 62:504–520

    Article  Google Scholar 

  • Honig M (1985) Partial retirement among women. J Hum Resources 20:613–621

    Article  Google Scholar 

  • Hurd MD (1990) Research on the elderly: economic status, retirement, and consumption and saving. J Econ Literat 2:565–637

    Google Scholar 

  • Kotlikoff L, Smith DE (1983) Pensions and the American economy. University of Chicago Press, Chicago

    Google Scholar 

  • Lazear EP, Rosen S (1987) Pension inequality. In: Bodie Z, Shoven JB, Wise DA (eds) Issues in pension economics. University of Chicago Press, Chicago, pp 341–359

    Google Scholar 

  • Mitchell OS, Luzadis R (1988a) Changes in pension incentives over time. Ind Labor Relat Rev 42:100–108

    Article  Google Scholar 

  • Mitchell OS, Luzadis R (1988b) Pension responses to Social Security. Report to the Social Security Administration, Grant No. 10-P-98289

  • Myers RJ (1985) Social security Richard Irwin, Homewood, IL

    Google Scholar 

  • Pozzebon S, Mitchell OS (1989) Married women's retirement behavior. J Popul Econ 2:39–53

    Article  Google Scholar 

  • Rust J (1989) A dynamic programming model of retirement behavior. In: Wise DA (ed) The economics of aging. University of Chicago Press, Chicago, pp 359–398

    Google Scholar 

  • U.S. Department of Health, Education, and Welfare (1975) U.S. decennial life tables (unpublished updates) National Center for Health Statistics, Washington, DC

    Google Scholar 

  • U.S. Department of Health and Human Services, Social Security Bulletin: Annual Statistical Supplement (various years). USGPO, Washington, DC

  • Woods JR (1988) Retirement-age women and pensions: findings from the new beneficiary survey. Soc Security Bull 51:5–16

    Google Scholar 

  • Zabalza A, Piachaud D (1981) Social Security and the elderly: a simulation of policy changes. J Public Econ 16:145–170

    Article  Google Scholar 

  • Zabalza A, Pissarides CA, Piachaud D (1980a) Social Security and the choice between full-time work, part-time work, and retirement. J Public Econ 14:245–276

    Article  Google Scholar 

  • Zabalza A, Pissarides CA, Piachaud D (1980b) Social Security, life-cycle saving, and retirement. In: Collard D, LecomberR, Slater M (eds) Income distribution: The limits to redistribution. Proceedings of the 31st Symposium of the Colston Research Society. Scientechnica, Bristol, pp 83–99

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Additional information

This research was funded by the Small Grants Program of the University of Wisconsin, Institute for Research on Poverty, the Cornell Institute of Social and Economic Research, and the New York State School of Industrial and Labor Relations. Excellent research assistance was provided by Vivian Fields and Silvana Pozzebon. Glen Cain provided helpful comments. Opinions expressed herein are those of the author and not those of the above-named persons or institutions.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Mitchell, O.S. Social security reforms and poverty among older dual-earner couples. J Popul Econ 4, 281–293 (1991). https://doi.org/10.1007/BF02426372

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF02426372

Keywords

  • Social Security
  • Labor Supply
  • Security System
  • Social Security System
  • Retirement Decision