Download entire publication - Social Security

More documents

Recommendations

Info

same groups (Table 6). For the last-wave boomers,however, non-Hispanic blacks experience the largestpercentage decline in income among race/ethnicitygroups, nonmarried individuals experience greaterpercentage declines in income than married individuals,and women experience a slightly larger percentagedecline in income than men. Blacks and nonmarriedindividuals have lower DC participation rates than non-Hispanic whites and married individuals and are lesslikely to voluntarily contribute enough to the substituteDC plan to make up for the lost DB benefits. The lossis greater for last-wave boomers who have more yearsof lower contributions. Still, the overall percentagedeclines in income are greater in the highest than in thelowest quintiles of individuals ranked either by sharedlifetime earnings or retirement income at age 67.Table 6.Percent change in mean family income per person at age 67 between the baseline and U.K. scenarios, byselected characteristicsCharacteristicFirst boomers(1946–1950)Second boomers(1951–1955)Third boomers(1956–1960)Last boomers(1961–1965)All -0.3 -1.1 -1.6 -1.6SexWomen -0.3 -1.0 -1.5 -1.7Men -0.3 -1.2 -1.7 -1.6Marital statusNever married 0.0 -1.5 -2.0 -1.8Married -0.3 -1.1 -1.5 -1.5Widowed -0.4 -0.9 -1.4 -1.8Divorced -0.5 -1.2 -1.8 -1.8Race/ethnicityNon-Hispanic white -0.3 -1.1 -1.6 -1.7Non-Hispanic black -0.1 -1.6 -1.5 -2.6Hispanic -0.3 -0.4 -1.4 -0.8Other -0.3 -0.8 -1.1 -1.2EducationHigh school dropout -0.3 -0.5 -0.8 -1.6High school graduate -0.3 -1.1 -1.5 -1.6College graduate -0.3 -1.2 -1.8 -1.7Labor force experienceLess than 20 years -0.3 -0.4 -0.7 -1.020 to 29 years 0.0 -0.4 -1.1 -0.930 or more years -0.3 -1.2 -1.7 -1.8Shared lifetime earningsBottom quintile 0.0 -0.2 -0.5 -0.92nd quintile -0.3 -0.5 -0.7 -1.13rd quintile -0.3 -0.9 -1.4 -1.64th quintile -0.4 -1.3 -1.5 -1.4Top quintile -0.4 -1.5 -2.3 -2.2Income quintileBottom quintile 0.0 0.0 -0.1 -0.12nd quintile 0.2 -0.4 -0.6 -0.83rd quintile -0.3 -0.7 -1.2 -1.24th quintile -0.4 -1.4 -1.7 -1.6Top quintile -0.5 -1.4 -2.1 -2.2SOURCE: Authors' computations of MINT5 (see text for details).NOTE: Projections exclude individuals with family wealth in the top 5 percent of the distribution. Shared lifetime earnings is the average ofwage-indexed shared earnings between ages 22 and 62, where shared earnings are computed by assigning each individual half the totalearnings of the couple in the years when the individual is married and his or her own earnings in years when nonmarried.12 Social Security Bulletin • Vol. 69 • No. 3 • 2009
Who Are the Winners and Losers?The accelerated switch from DB to DC plans illustratedin the U.K. scenario produces both losers andwinners. Many boomers will lose under the U.K.scenario, particularly mid- and late-career employeeswhose pension benefits will be frozen before reachingtheir highest accrual rate, those who contribute little ornothing to DC plans, and those who have lower thanaverage market returns. Others, however, may gainfrom the shift from DB to DC plans, especially thosewho currently fare poorly under DB plans becausethey have intermittent work histories or change jobsfrequently and those with high rates of return on theirretirement account investments.Our simulations show that the losers greatlyoutnumber the winners (Table 7). 16 When the shiftTable 7.Percent of individuals who win and lose at age 67 between the baseline and U.K. scenarios, by selectedcharacteristicsCharacteristicFirstboomers(1946–1950)WinnersSecondboomers(1951–1955)Thirdboomers(1956–1960)Lastboomers(1961–1965)Firstboomers(1946–1950)LosersSecondboomers(1951–1955)Thirdboomers(1956–1960)Lastboomers(1961–1965)All 7 8 9 11 12 18 22 26SexWomen 6 7 9 10 10 17 21 25Men 9 9 10 12 14 20 23 27Marital statusNever married 4 4 6 7 6 14 17 20Married 9 9 11 13 13 20 24 28Widowed 4 5 7 9 8 14 16 22Divorced 5 5 7 8 9 14 18 24Race/ethnicityNon-Hispanic white 8 8 10 11 13 20 24 28Non-Hispanic black 5 6 8 10 10 16 18 22Hispanic 5 6 7 9 8 11 17 18Other 5 7 9 9 10 14 15 23EducationHigh school dropout 3 4 5 6 6 8 11 14High school graduate 7 8 9 11 12 18 21 24College graduate 10 9 11 12 15 22 28 34Labor force experienceLess than 20 years 2 2 3 4 3 5 6 920 to 29 years 4 7 7 9 5 9 14 1630 or more years 9 9 11 12 14 21 25 30Shared lifetime earningsBottom quintile 1 2 4 6 2 4 6 92nd quintile 5 7 8 10 8 12 15 213rd quintile 8 9 10 12 13 19 23 264th quintile 10 10 12 13 16 25 28 30Top quintile 13 11 12 13 20 31 37 44Income quintileBottom quintile 1 2 4 6 2 3 6 82nd quintile 5 8 8 10 6 11 15 193rd quintile 7 10 10 12 13 19 23 254th quintile 11 9 12 13 18 26 29 30Top quintile 13 11 12 12 20 32 38 48SOURCE: Authors' computations of MINT5 (see text for details).NOTE: Projections exclude individuals with family wealth in the top 5 percent of the distribution. Shared lifetime earnings is the average ofwage-indexed shared earnings between ages 22 and 62, where shared earnings are computed by assigning each individual half the totalearnings of the couple in the years when the individual is married and his or her own earnings in years when nonmarried. Winners andlosers are defined as having at least a $10 change in income between the baseline and U.K. scenarios.Social Security Bulletin • Vol. 69 • No. 3 • 2009 13
Page 1 and 2: Social SecuritySocial SecurityBulle
Page 3: Social SecurityBulletin Vol. 69, No
Page 6 and 7: Perspectives77 An Empirical Study o
Page 8 and 9: Selected Abbreviations—continuedM
Page 10: within the next few years (Aglira 2
Page 14 and 15: coverage varies significantly by ra
Page 16 and 17: non-Hispanic white, and college edu
Page 20 and 21: from DB to DC pensions is accelerat
Page 22 and 23: Table 8.Percent of individuals who
Page 24 and 25: not necessarily the largest gains a
Page 26 and 27: shoring-up DB plans before those pl
Page 28 and 29: Table B-1.Percent change in mean pe
Page 30 and 31: Table B-3.Percent of individuals wh
Page 32 and 33: ReferencesAaronson, Stephanie, and
Page 35 and 36: Social Security Administration’s
Page 37: Chart 1.Historical expansion of Soc
Page 40 and 41: self-employment information for the
Page 42 and 43: (Cronin 1985). The final earnings r
Page 44 and 45: prior to 1950, first year of earnin
Page 46 and 47: average indexed monthly earnings (A
Page 48 and 49: 13For an explanation of how the sel
Page 50 and 51: Kopczuk, Emmanuel Saez, and Jae Son
Page 53 and 54: Occupations of SSI Recipients Who W
Page 55 and 56: on the differences between the occu
Page 57 and 58: prediction models. Table A-1 lists
Page 59 and 60: Occupational Distributions of theEm
Page 61 and 62: similar, only 4 percent of the popu
Page 63 and 64: Table 5.Estimated occupational dist
Page 65 and 66: Table 7.Predicted Herfindahl-Hirsch
Page 67 and 68: Table 9.Estimated occupational dist
Page 69 and 70:
Table 11.Average annual wages of wo
Page 71 and 72:
Table A-2.Means and standard errors
Page 73 and 74:
Table A-3.Coefficients and standard
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
management, professional, and relat
Page 81:
Stapleton, David C., Nanette Goodma
Page 84 and 85:
Selected Abbreviations—continuedO
Page 86 and 87:
The 1983 Amendments to the Social S
Page 88 and 89:
Chart 1.Proportion of new claimants
Page 90 and 91:
Table 4.The evolution of the ARF an
Page 92 and 93:
for the test of equality of means b
Page 94 and 95:
Table 8.Average monthly Social Secu
Page 96 and 97:
in the chart, especially for men, t
Page 98 and 99:
6This is a very important character
Page 100 and 101:
Benítez-Silva, Hugo, Berna Demiral
Page 103 and 104:
OASDI and SSI Snapshot andSSI Month
Page 105 and 106:
Monthly Statistical Snapshot, Augus
Page 107 and 108:
Table 2.Recipients, by eligibility
Page 109 and 110:
SSI Federally Administered Payments
Page 111 and 112:
Table 7.Average monthly payment, by
Page 113:
Awards of SSI Federally Administere
Page 116 and 117:
Copyright—Authors are responsible
Page 119 and 120:
Program Highlights, 2009Old-Age, Su
show all

Download entire publication - Social Security

Create successful ePaper yourself

Delete template?

Save as template?