Wednesday, November 13, 2013

Has Social Security redistributed from whites to minorities – or is it the othe rway around?

Caleb Quakenbush, Karen E. Smith and Eugene Steuerle of the Urban Institute have an interesting new study looking at how Social Security redistributes according to race, a topic which has long generated controversy in policy circles. But the authors take a new angle on things: looking not only at how Social Security taxes and benefits are distributed within a single birth cohort, but also across time. For instance, Social Security was far more generous to earlier birth cohorts (who tend to be more predominantly white) and less generous to later ones (who have greater numbers of minorities). As a result, the program may be redistributing from these younger, less-white generations to older, ‘whiter’ generations.

In any case, here’s the abstract:

This brief considers how Social Security’s many benefit and tax features have redistributed across groups over time. Using Current Population Survey data from 1970 through 1994 and microsimulation projections from the Urban Institute’s DYNASIM3 model, we find that for many decades, Social Security redistributed from blacks, Hispanics, and other people of color, to whites. These transfers will likely to continue in future decades. Our findings suggest that future reforms that place the burden of Social Security reform solely on younger, more diverse generations may have undesired distributional consequences if the aim of the program is to provide greater relative protections to more vulnerable groups.

You can check out the whole article here.

1 comment:

Nichole Mercado said...

Why do they have to choose? Can't they just distribute it to both? Or can't they just asses if the person needs Social Security or not. Why do they have to focus on one particular race? This is the reason why USA Security is needed, people tend to constantly judge each other which most of the time ends up in a brawl. We should not encourage Labelism.