New paper: “Marital History, Race, and Social Security Spouse and Widow Benefit Eligibility in the United States”

SSRN turns up a new paper, "Marital History, Race, and Social Security Spouse and Widow Benefit Eligibility in the United States," by Christopher R. Tamborini, Howard Iams and Kevin Whitman, all of the Social Security Administration. Here's the abstract:

Large-scale changes in American family structures over the past decades have important implications for the retirement experiences of women. In this study, the authors use a restricted-use file of the Marital History Module of the U.S. Census Bureau's Survey of Income and Program Participation to investigate changes in the marital histories of women aged 40 to 69 years between 1990 and 2004, with a focus on outcomes relevant for Social Security spouse and widow benefit eligibility. Multinomial and binary logistic regression analyses show significant changes in women's marital patterns since 1990, with more substantial shifts occurring among recent cohorts. Due to downward trends in marriage, the authors find a modest decline in Social Security spouse and widow benefit eligibility in 2004, particularly among Black women born toward the end of the baby boom generation.

This made me think of two things: first, about the only way to get a truly good return from Social Security going forward is for one member of a household to receive spousal benefits; but second, changes in marital patterns by race could mean that spousal benefits become predominantly for white people. I prepared the chart below from Census data a few years ago and so the data isn't completely up to date, but the changes in black/white marriage rates since the 1950s are pretty extreme.

Back in 1950 blacks had roughly the same marriage rate as whites, but since then patterns have sharply diverged. In 2000 around 25 percent of whites over age 15 had never been married, which is only a few percentage points higher than the 1950 level. But around 44 percent of blacks had never been married in 2000, compared to only around 25 percent in 1950. As a result, fewer and fewer black retirees in the future will tend to be eligible for spousal benefits.

I'm not a huge fan of Social Security's spouse benefits, which seem to reward neither contributions nor need, and – as I'll point out in Friday's sure-to-be-fantastic AEI panel on Social Security's effect on work incentives – impose high marginal tax rates on women's labor. But these racial disparities might be another reason to give spousal benefits the heave-ho.