Working Paper: NBER ID: w10466
Authors: Gary V. Engelhardt; Jonathan Gruber
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.
Keywords: social security; elderly poverty; instrumental variable
JEL Codes: I3; H3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social security benefits (H55) | elderly poverty (I32) |
| social security benefits (H55) | poverty rate (I32) |
| social security benefits (H55) | poverty among elderly families (I32) |
| social security benefits (H55) | absolute poverty rates for families (I32) |
| social security benefits (H55) | living arrangements and economic wellbeing of the elderly (J14) |
| growth in social security (H55) | decline in elderly poverty (I32) |