The Effects of Differential Income Replacement and Mortality on U.S. Social Security Redistributions
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We study redistributions via the United States Social Security retirement system for cohorts of men born during the second half of the 20th century. Our focus is on redistributions across race and education groups. The cohorts we study are younger than cohorts studied in previous, similar research, and thus more exposed to recent increases in earnings inequality. All else equal, this should increase the degree of progressivity of Social Security redistributions due to the structure of the benefit formula, but we find that Social Security redistributions exhibit little progressivity for individuals born as late as 1980. Differential mortality rates across race and education groups are the primary explanation. While black-white mortality gaps have narrowed some in recent years, they remain large and dull progressivity. Mortality gaps by education level are also large and unlike the race gaps are widening, which puts additional regressive pressure on Social Security redistributions.