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<h1 itemprop="headline">Measuring the Relative Importance of Social Security Benefits to the Elderly</h1>
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<div id="hByline">by <span itemprop="author">T. Lynn Fisher</span><br>Social Security Bulletin, <abbr title="Volume">Vol.</abbr> 67, <abbr title="Number">No.</abbr> 2, 2007 (released February 2008)</div>
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<p id="synopsis" itemprop="description">Provided is a discussion of the cumulative effects of the measurement alternatives described in the three previous articles: considering family income of persons rather than aged units, using administrative data in place of survey reported data, and switching the data source from <abbr class="spell">CPS</abbr> to <abbr>SIPP</abbr>. The current-methodology <abbr class="spell">CPS</abbr> statistic of 17.9 percent of beneficiary aged units receiving all of their income from Social Security in 1996 falls to a substantially smallerestimated 4.5 percent of elderly beneficiary persons based on family income when using the SIPP and Social Security administrative data.</p>
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<p>The author is with the Division of Policy Evaluation, Office of Research, Evaluation, and Statistics, Office of Policy, Social Security Administration.</p>
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<p>Contents of this publication are <a href="/policy/accessibility.html">not copyrighted</a>; any items may be reprinted, but citation of the <i>Social Security Bulletin</i> as the source is requested. The findings and conclusions presented in the <i>Bulletin</i> are those of the authors and do not necessarily represent the views of the Social Security Administration.</p>
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<h2>Introduction</h2>
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<p>Financial adequacy in retirement largely depends on Social Security, pensions, and savings—commonly referred to as the "three-legged stool" of retirement income. Correspondingly, the elderly who receive all of their income from Social Security benefits are recognized as being economically vulnerable. <i>Income of the Population 55 or Older, 2004</i>, produced by the Social Security Administration (<abbr class="spell">SSA</abbr> 2006), reported that 21 percent of beneficiary aged units 65 or older received all of their income from Social Security. Three other articles in this issue of the <i>Bulletin</i> examine how the estimate of the percentage of elderly beneficiaries receiving most or all of their income from Social Security changes depending on the unit of observation and the source of the data. This article presents the combined effects of the unit of observation and the data source and evaluates the relative impact of each measurement option.</p>
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<p>The unit of observation is an important methodological choice related to what constitutes an economic resource. The measure of the relative importance of Social Security income that <abbr class="spell">SSA</abbr> has been using in its data series includes only income received by an aged unit (aged nonmarried person or aged couple). In addition, each married couple counts as one unit, just as one nonmarried person counts as one unit. Different units of observation have been used for other measures of economic vulnerability; for example, the official poverty measure includes income received by all members of the family and counts each person as a unit when determining poverty rates. This article constructs statistics similar to official poverty measures for comparison with the aged-unit statistics produced by <abbr class="spell">SSA</abbr>.</p>
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<p>The publicly available Annual Social and Economic (<abbr>ASEC</abbr>) Supplement to the Current Population Survey (<abbr class="spell">CPS</abbr>), referred to here as the March Supplement, is used to produce both <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i>. One alternative to using the <abbr class="spell">CPS</abbr> as the data source would be to generate statistics from the Survey of Income and Program Participation (<abbr>SIPP</abbr>). Another option would be to combine administrative data on Social Security benefits and Supplemental Security Income (<abbr class="spell">SSI</abbr>) with reported data from the <abbr class="spell">CPS</abbr> or the <abbr>SIPP</abbr>. This article uses data on annual income for 1996 from both surveys and administrative data in its analysis.</p>
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<p>The article illustrates the effects of these measurement alternatives in combination. The cumulative effect of switching from the <abbr class="spell">CPS</abbr> to the <abbr>SIPP</abbr>, using administrative data in place of survey-reported data, and considering family income of persons rather than aged units is striking. The published statistic of 17.9 percent of elderly beneficiary aged units being completely reliant on Social Security in 1996 falls to an estimated 4.8 percent of elderly beneficiary persons based on family income using the <abbr>SIPP</abbr> and administrative data.</p>
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<h2>Unit of Observation</h2>
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<p>The Social Security Administration produces two series on the income of the elderly and near-elderly: <i>Income of the Population 55 or Older</i> (since 1976) and <i>Income of Aged Chartbook</i> (since 1990). Both publications primarily provide income data for aged units, which consist either of nonmarried persons or married couples.</p>
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<p>Although these <abbr class="spell">SSA</abbr> publications focus on aged units, researchers may choose to use different units of observation, such as persons, families, or households, based on the resources they wish to measure. One prominent example is the official poverty statistic produced by the <abbr>U.S.</abbr> Census Bureau, which includes family income when determining whether a person is in poverty. To demonstrate the effect of the unit of observation, this article compares estimates of the relative importance of Social Security using aged units with estimates using the family income of aged persons.</p>
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<p>Statistics for <i>aged units</i> treat each marital unit (married couple or nonmarried individual) as one unit. A nonmarried individual has only his or her own income and demographic attributes. In both of <abbr class="spell">SSA</abbr>'s data series cited earlier, aged units classified as "65 or older" are nonmarried persons 65 or older or married couples in which the husband is 65 or older or the husband is younger than 55 and the wife is 65 or older. All other demographic characteristics for a married couple, including the sample statistical weight, are that of the husband. Income for the married couple is the sum of both spouses' income; if either spouse has income from a specific source, the married couple is considered to be a recipient unit. The aged unit focuses on the income of the aged, whether they live with other family members or not, but counts married couples as a single unit with shared resources. Aged-unit statistics exclude the income of nonspouse members and hence may not provide a complete picture of the resources available to the unit. Interpreting aged-unit statistics in the same was as person statistics will emphasize the economic well-being of nonmarried persons relative to that of married persons.</p>
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<p>Statistics for the <i>family income of persons</i> are based on the demographic attributes (age, sex, race, and Hispanic origin) of each person. Total income from all family members (related through blood, marriage, or adoption) is treated as another attribute of the person. If any person in the family has income from a specific source, the aged person is considered to be in a recipient family.</p>
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<h2>Data Sources</h2>
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<p><i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i> are derived from the Annual Social and Economic Supplement to the Current Population Survey, which is conducted annually by the Census Bureau. Alternative data sources, which have different strengths and weaknesses, are also available. The Survey of Income and Program Participation is strong at measuring small or infrequently received sources of income but is not conducted at regular intervals. <abbr class="spell">SSA</abbr>'s administrative records are more accurate than survey data but lack demographic information and supply data for only a few income sources. This analysis uses income data for 1996 because the <abbr>SIPP</abbr> match rate to administrative data declined considerably in the 2001 panel.<sup><a href="#mn1" id="mt1">1</a></sup></p>
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<h3>Survey Data</h3>
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<p>Surveys may differ in many ways, and these differences may affect the statistics produced from the resulting data. The following descriptions of the <abbr class="spell">CPS</abbr> and <abbr>SIPP</abbr> briefly describe some of the broader differences between the surveys that may influence differences in the statistics produced using their data, such as questionnaire detail and the frequency of interviews.</p>
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<p class="noindent"><span class="h4">Current Population Survey.</span> The Annual Social and Economic (<abbr>ASEC</abbr>) Supplement to the <abbr class="spell">CPS</abbr> is conducted annually in March.<sup><a href="#mn2" id="mt2">2</a></sup> The survey, also known as the March Supplement, collects data on income received during the previous calendar year for approximately 35 cash and in-kind sources. Official estimates of income and poverty in the United States are based on this survey (<abbr>U.S.</abbr> Census Bureau 2007).</p>
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<p>This article uses the 1997 March Supplement to the <abbr class="spell">CPS</abbr>, which collected data for annual income received in 1996. Persons are designated as "65 or older" if they were at least age 65 as of the interview in March 1997. Aged units classified as "65 or older" are nonmarried persons 65 or older (in March 1997) or married couples in which the husband is 65 or older or the husband is younger than 55 and the wife is 65 or older (in March 1997).</p>
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<p class="noindent"><span class="h4">Survey of Income and Program Participation.</span> The <abbr>SIPP</abbr> is a longitudinal panel survey conducted by the Census Bureau; panels begin periodically with durations ranging from 2½ to 4 years. The survey is designed to collect data on sources and amounts of income to provide improved statistics on the distribution of income in the United States. Data are collected on approximately 70 cash and in-kind sources of income (<abbr>U.S.</abbr> Census Bureau 2005 and 2007).</p>
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<p>This article uses the 1996 <abbr>SIPP</abbr> panel for income received during 1996; income is reported for individual months and summed over the entire year.<sup><a href="#mn3" id="mt3">3</a></sup> Persons classified as "65 or older" were at least age 64 as of the interview in March 1996. Aged units classified as "65 or older" were nonmarried persons 64 or older (in March 1996) or married couples in which the husband was 64 or older or the husband was younger than 54 and the wife was 64 or older (in March 1996).<sup><a href="#mn4" id="mt4">4</a></sup></p>
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<h3>Administrative Data</h3>
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<p>The Social Security Administration administers two cash benefit programs—Social Security, or Old-Age, Survivors, and Disability Insurance (<abbr class="spell">OASDI</abbr>), and Supplemental Security Income (<abbr class="spell">SSI</abbr>), the separate program for low-income aged and disabled persons.</p>
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<p>In this article, statistics based on administrative data refer to statistics based on a combination of survey-reported and administrative information. Self-reported data were replaced with Social Security's administrative data for matched survey records.<sup><a href="#mn5" id="mt5">5</a></sup> Self-reported data from the survey were used for unmatched survey respondents. A slightly greater proportion of observations in the 1996 <abbr>SIPP</abbr> were matched with Social Security administrative records (85 percent of those aged 64 or older present in March 1996) than in the March 1997 Supplement of the <abbr class="spell">CPS</abbr> (77 percent of those aged 65 or older).</p>
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<p class="noindent"><span class="h4">Social Security (<abbr class="spell">OASDI</abbr>).</span> Survey-based Social Security benefit amounts have been replaced with the administrative amount of the Social Security benefit paid to the beneficiary plus the beneficiary's Medicare Part B premium (when the latter is applicable) in both the <abbr>SIPP</abbr> and the <abbr class="spell">CPS</abbr>.<sup><a href="#mn6" id="mt6">6</a></sup></p>
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<p class="noindent"><span class="h4">Supplemental Security Income (<abbr class="spell">SSI</abbr>).</span> Survey-based <abbr class="spell">SSI</abbr> payments have also been replaced by administrative payment amounts.<sup><a href="#mn7" id="mt7">7</a></sup> The process is somewhat more complicated for the <abbr class="spell">SSI</abbr> program because there are federal and state components to <abbr class="spell">SSI</abbr> payments. The <abbr>SIPP</abbr> and the <abbr class="spell">CPS</abbr> treat this differently in their questionnaires: the <abbr>SIPP</abbr> asks specifically for federal payments and state payments separately; the <abbr class="spell">CPS</abbr> asks respondents for a single, combined <abbr class="spell">SSI</abbr> payment amount.</p>
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<p>For states with federally administered state <abbr class="spell">SSI</abbr> payments, both federal and state <abbr class="spell">SSI</abbr> payment amounts were taken directly from administrative payment data files and were used to replace reported <abbr class="spell">SSI</abbr> payments for matched observations for both the <abbr>SIPP</abbr> and the <abbr class="spell">CPS</abbr>. For states without federally administered <abbr class="spell">SSI</abbr> payments, the procedure was different for processing the <abbr>SIPP</abbr> and the <abbr class="spell">CPS</abbr>. For the <abbr>SIPP</abbr>, survey-collected federal payments were replaced by administrative data, and survey-based state payments were not changed. For the <abbr class="spell">CPS</abbr>, the survey-based <abbr class="spell">SSI</abbr> payment (combined state and federal) amount was replaced by administrative information.<sup><a href="#mn8" id="mt8">8</a></sup></p>
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<h2>Impact of Changes in Unit of Observation and Data Source</h2>
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<p>This analysis compares the estimates of the relative importance of Social Security when changes to the unit of observation and data sources are made singly or in combination. Table 1 highlights the effects of incorporating various combinations of changes. The numbers were calculated according to the methodology currently used in <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i>. Because the results are similar for beneficiaries receiving almost all (90 percent) of their income from Social Security and beneficiaries receiving all of their income from Social Security (see Table 1), only the latter statistics are discussed.</p>
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<div class="table" id="table1">
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<table>
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<caption><span class="tableNumber">Table 1. </span>Percentage of beneficiaries receiving almost all or all of their income from Social Security, 1996</caption>
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<colgroup span="1" style="width:20em"></colgroup>
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<colgroup span="2" style="width:4em"></colgroup>
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<colgroup span="2" style="width:4em"></colgroup>
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<thead>
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<tr>
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<th class="stubHeading" rowspan="2" scope="colgroup">Unit of observation</th>
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<th class="spanner" colspan="2" scope="colgroup">90 percent or more<br>from Social Security</th>
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<th class="spanner" colspan="2" scope="colgroup">100 percent from<br>Social Security</th>
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</tr>
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<tr>
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<th scope="col"><abbr class="spell">CPS</abbr></th>
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<th scope="col"><abbr>SIPP</abbr></th>
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<th scope="col"><abbr class="spell">CPS</abbr></th>
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<th scope="col"><abbr>SIPP</abbr></th>
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</tr>
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</thead>
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<tbody>
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<tr>
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<th class="stub0" scope="rowgroup">Aged unit</th>
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<td colspan="4"></td>
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</tr>
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<tr>
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<th class="stub1" scope="row">Survey data only</th>
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<td>30.4</td>
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<td>19.9</td>
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<td>17.9</td>
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<td>8.5</td>
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</tr>
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<tr>
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<th class="stub1" scope="row">Survey and administrative data</th>
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<td>30.0</td>
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<td>20.5</td>
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<td>17.3</td>
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<td>8.4</td>
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</tr>
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<tr>
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<th class="stub0" scope="rowgroup">Family income of persons</th>
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<td colspan="4"></td>
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</tr>
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<tr>
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<th class="stub1" scope="row">Survey data only</th>
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<td>22.3</td>
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<td>13.2</td>
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<td>11.4</td>
|
|
<td>4.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Survey and administrative data</th>
|
|
<td>22.2</td>
|
|
<td>13.7</td>
|
|
<td>11.2</td>
|
|
<td>4.8</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="5">SOURCES: Author's calculations using the March 1997 Current Population Survey, the 1996 Survey of Income and Program Participation, and Social Security administrative records.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="5">NOTE: <abbr class="spell">CPS</abbr> = Current Population Survey; <abbr>SIPP</abbr> = Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<h3>Impact of the Unit of Observation</h3>
|
|
<p>Taken alone, shifting the unit of observation from aged units causes the estimate of 17.9 percent of beneficiary aged units receiving all of their income from Social Security to change to 11.4 percent of the elderly in beneficiary families receiving all of their family income from Social Security. There are two reasons why the estimate for aged units is larger: (1) the aged-unit statistic excludes nonspouse family income, which is included in the measure for persons with family income, and (2) an aged unit may be a nonmarried person or a married couple, in which case one unit consists of two persons. If an aged-unit statistic is interpreted as being based on persons, it places extra emphasis on nonmarried persons, who tend to be less well off economically;<sup><a href="#mn9" id="mt9">9</a></sup> in this case it corresponds to a higher percentage of beneficiaries/beneficiary units receiving all of their income from Social Security.<sup><a href="#mn10" id="mt10">10</a></sup></p>
|
|
<h3>Impact of the Survey Source</h3>
|
|
<p>Switching only the survey from the <abbr class="spell">CPS</abbr> to the <abbr>SIPP</abbr> causes the estimate of elderly beneficiary aged units receiving all of their income from Social Security to drop by more than half, from 17.9 percent to 8.5 percent. This result is due in part to the <abbr>SIPP</abbr>'s frequent interviews and questionnaire, which were designed to pick up small or infrequently received sources of income. A more in-depth look at the differences in income reported in the two surveys suggests that underreporting of the receipt of asset income, and possibly pensions, in the <abbr class="spell">CPS</abbr> leads to discrepancy in the two estimates.<sup><a href="#mn11" id="mt11">11</a></sup></p>
|
|
<h3>Impact of Using Administrative Data</h3>
|
|
<p>Social Security's administrative data from the <abbr class="spell">OASDI</abbr> and <abbr class="spell">SSI</abbr> programs can be used to replace the income amounts reported by respondents in surveys such as the <abbr class="spell">CPS</abbr> and the <abbr>SIPP</abbr>. However, the impact of using administrative data for program income amounts has a relatively small effect when compared with either the effects of using statistics with various definitions of the unit of observation or various surveys chosen for analysis. The percentage of all beneficiary units receiving all of their income from Social Security decreases slightly, from 17.9 percent using only reported survey data in the <abbr class="spell">CPS</abbr> to 17.3 percent when administrative data are matched to the <abbr class="spell">CPS</abbr> to correct program income amounts. This decrease in the <abbr class="spell">CPS</abbr> estimates because of the use of administrative data indicates that either some nonbeneficiary units are reporting Social Security benefits that they have not received, some units receiving <abbr class="spell">SSI</abbr> are not reporting <abbr class="spell">SSI</abbr>, or both.<sup><a href="#mn12" id="mt12">12</a></sup> The change in the estimates from switching reported data for administrative data in the <abbr class="spell">CPS</abbr> (0.6 percentage points) is smaller than the change that occurs when switching from <abbr class="spell">CPS</abbr>-reported data to <abbr>SIPP</abbr>-reported data (9.4 percentage points) partly because administrative records are used in place of reported data only for Social Security benefits and <abbr class="spell">SSI</abbr>, not for all sources of income.</p>
|
|
<p>Depending on the combination of choices of data sources and units of observation, 4.8 percent to 17.9 percent of elderly beneficiaries are estimated to be completely dependent on Social Security for their income. The lowest figure, 4.8 percent, was calculated for the person based on family income using the <abbr>SIPP</abbr>. The highest figure, 17.9 percent, was calculated for the aged unit using only reported data from the <abbr class="spell">CPS</abbr>—the methodology currently used for the statistics published in both <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i>. The majority of this difference is attributable to use of the <abbr>SIPP</abbr> rather than the <abbr class="spell">CPS</abbr> because the <abbr>SIPP</abbr> better captures sources of income other than Social Security, particularly asset income.</p>
|
|
<h2>Future Directions</h2>
|
|
<p>The purpose of these exercises was to demonstrate how key measurement choices affect our understanding of the resources available to the elderly. Depending on the unit of observation and underlying data, the percentage of elderly beneficiaries receiving all of their income from Social Security ranges from 4.8 percent to 17.9 percent. Given this broad range of results, a natural next question is whether any of the measurement options described in this article should be adopted when measuring the relative importance of Social Security for elderly beneficiaries. As expected, there are tradeoffs associated with each option.</p>
|
|
<h3>Choice of Unit of Observation</h3>
|
|
<p>In the case of choosing a unit of observation, the cost of changing from one unit to another is the discontinuity it would introduce into a nearly <span class="nobr">30-year</span> time series. Further, some researchers want to include only income of the elderly marital unit, while others want information on income of the entire family. To better accommodate the needs of users of <i>Income of the Population 55 or Older</i>, <abbr class="spell">SSA</abbr> has revised and expanded the publication beginning with an expanded 2004 edition that will be available online only. The new structure provides more information on aged units and the family income of elderly persons. An electronic version of the new publication for 2004 data is expected to be available in 2008, and electronic and paper copies of the new format for 2006 data are also expected to be available in 2008.</p>
|
|
<h3>Choice of Survey</h3>
|
|
<p>The selection of survey is highly influential on the results presented in this article, but there are tradeoffs among data sources. The <abbr class="spell">CPS</abbr> is timely and is used by other agencies for official statistics, but it underestimates whether certain income types were received. The <abbr>SIPP</abbr> does a better job of ascertaining whether or not certain income types were received, but it may be more likely to underestimate the amounts of that income.<sup><a href="#mn13" id="mt13">13</a></sup> Also, new <abbr>SIPP</abbr> panels have not started at regular intervals, which makes it difficult to produce a consistent time-series publication.<sup><a href="#mn14" id="mt14">14</a></sup> Other surveys are available but have not been matched to Social Security administrative records. Some surveys provide data on pension withdrawals, savings, and wealth not captured in the <abbr class="spell">CPS</abbr>, which would provide a broader picture of economic well-being, but these data are not necessarily available at individual and family levels. In the case of <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i>, availability of data at regular intervals and the ability to work with person- and family-level data have led to the selection of the <abbr class="spell">CPS</abbr> as the underlying source of data.<sup><a href="#mn15" id="mt15">15</a></sup></p>
|
|
<p>The Social Security Administration has agreements in place to match its administrative records to the <abbr>SIPP</abbr> and <abbr class="spell">CPS</abbr>, but only after a significant time lag and not to all persons in the surveys.<sup><a href="#mn16" id="mt16">16</a></sup> The choice here is one of timeliness versus accuracy. Even if matched data were to be used, the question then would be whether to use only matched respondents and data or matched data with reported data for respondents unable to be matched. Using only matched respondents would introduce bias if matched respondents differ systematically in any way from unmatched respondents; either choice may lead to false movements in statistics over time if the proportions of the sample that are matched change over time. Although it may not be desirable to publish a statistical series using administrative data, these data are useful for assessing the accuracy of self-reported data.</p>
|
|
<h3>Other Issues</h3>
|
|
<p>Another issue that has not been addressed in this article is the definition of income, which can differ by agency and usage. The definition of income in both <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i> is the Census Bureau definition of total money income. The definition of total money income excludes capital gains, <span class="nobr">401(k)</span> and individual retirement account (<abbr class="spell">IRA</abbr>) withdrawals that are not regularly scheduled, and noncash benefits. These items also provide resources for the elderly, which are not captured under <abbr class="spell">SSA</abbr>'s current measure of the relative importance of Social Security. The appendix addresses some of the effects of including noncash benefits as income. In addition, <abbr class="spell">SSA</abbr> is currently working with Census to gather and analyze data on nonannuitized withdrawals from pensions and <abbr class="spell">IRA</abbr>s.</p>
|
|
<p>Regardless of any changes that may be implemented in <i>Income of the Population 55 or Older</i> or <i>Income of the Aged</i>, it is important to keep in mind the issues outlined here when interpreting the data.</p>
|
|
<h2>Appendix:Inclusion of Noncash Benefits</h2>
|
|
<p>Just as family income may be considered a resource, noncash benefits like energy assistance or food stamps may also be a resource for many of the elderly. Noncash benefits are not included as income for official statistics such as the poverty rate, but they can be an important resource to recipients. Among its list of recommendations for changes to the measurement of poverty, the National Research Council (1995) has suggested that noncash benefits be considered when determining the resources available to an individual or family. A workshop on experimental poverty measures by the National Research Council (2005, 4) reported that</p>
|
|
<blockquote>the omission of these [taxes and near-money government benefits] from the official definition of income has become increasingly serious in recent years because government transfers are now concentrated in benefits that are not considered part of families' gross cash income—such as housing subsidies, child care subsidies, and the <abbr class="spell">EITC</abbr>—rather than cash welfare assistance. The unfortunate result is that the current official poverty measure no longer captures either people's perceptions of poverty or the effect of various policies on poverty.</blockquote>
|
|
<p>Various noncash benefit programs provide food, energy, housing, medical care, transportation, or child care to persons who qualify.</p>
|
|
<p>Inclusion of the value of noncash benefits as income for poverty measures has been controversial and difficult to measure.<sup><a href="#mn17" id="mt17">17</a></sup> Regardless of the dollar values assigned to food stamps or the like, noncash benefits are a resource. This Appendix presents data on the noncash benefits received by aged units (or persons) receiving all of their income from Social Security and recalculates reliance on Social Security with noncash benefits counted as a resource. These calculations do not require dollar values to be assigned to the noncash benefits received.</p>
|
|
<p>The analysis below incorporates food, energy, and housing benefits for 1996. Food benefits in the Current Population Survey comprise Food Stamps; in the <abbr>SIPP</abbr>, they comprise the Special Supplemental Nutrition Program for Women, Infants, and Children (<abbr>WIC</abbr>) and Food Stamps.<sup><a href="#mn18" id="mt18">18</a></sup> Energy assistance in both surveys includes vouchers, direct payments to utilities, and checks to the household for energy. Housing assistance in both surveys is indicated by a rent subsidy or residence in public housing. Medical benefits in the form of Medicare Part A and Medicaid were not included.<sup><a href="#mn19" id="mt19">19</a></sup> Transportation assistance data were unavailable in the 1996 <abbr>SIPP</abbr> panel until 1998 (wave 8), and child care benefits are unlikely to be a significant source of noncash income for the elderly.</p>
|
|
<p>According to the <abbr>SIPP</abbr>, 24.6 percent of beneficiary aged units reporting all of their cash income from Social Security received housing, energy, or food assistance in 1996, and 5.3 percent of elderly aged units reporting all of their cash income from Social Security received assistance from more than one source (Table <span class="nobr">A-1</span>). Receipt of noncash benefits is similar in the <abbr class="spell">CPS</abbr>, with 20.9 percent of beneficiary aged units reporting all of their cash income from Social Security receiving housing, energy, or food assistance and 4.8 percent receiving assistance from more than one source.</p>
|
|
<div class="table" id="tableA1">
|
|
<table>
|
|
<caption><span class="tableNumber">Table A-1. </span>Percentages of aged units 65 or older reporting noncash benefits, 1996</caption>
|
|
<colgroup span="1" style="width:8em"></colgroup>
|
|
<colgroup span="2" style="width:4em"></colgroup>
|
|
<colgroup span="2" style="width:4em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th rowspan="2" class="stubHeading" scope="colgroup">Type of<br>noncash benefit</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">All aged units</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">Beneficiary aged<br>units reporting<br>all income from<br>Social Security</th>
|
|
</tr>
|
|
<tr>
|
|
<th scope="col"><abbr class="spell">CPS</abbr></th>
|
|
<th scope="col"><abbr>SIPP</abbr></th>
|
|
<th scope="col"><abbr class="spell">CPS</abbr></th>
|
|
<th scope="col"><abbr>SIPP</abbr></th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="row">Energy</th>
|
|
<td>3.3</td>
|
|
<td>3.4</td>
|
|
<td>5.3</td>
|
|
<td>6.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Food</th>
|
|
<td>5.6</td>
|
|
<td>5.5</td>
|
|
<td>10.5</td>
|
|
<td>11.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Housing</th>
|
|
<td>5.5</td>
|
|
<td>5.3</td>
|
|
<td>10.1</td>
|
|
<td>11.8</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="5">SOURCES: Author's calculations using the March 1997 Current Population Survey and the 1996 Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="5">NOTE: <abbr class="spell">CPS</abbr> = Current Population Survey; <abbr>SIPP</abbr> = Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>As expected, the inclusion of noncash benefits leads to a decline in the percentage of aged units reporting complete dependence on Social Security. In the <abbr class="spell">SIPP</abbr>, inclusion of food, energy, and housing assistance results in a drop of 2.1 percentage points in 100 percent reliance on Social Security benefits; in the <abbr class="spell">CPS</abbr>, inclusion of these benefits causes a decrease of 3.7 percentage points (Table <span class="nobr">A-2</span>).</p>
|
|
<div class="table" id="tableA2">
|
|
<table>
|
|
<caption><span class="tableNumber">Table A-2. </span>Percentage of beneficiary aged units 65 or older reporting all income from Social Security, including various noncash benefits as income, 1996</caption>
|
|
<colgroup span="1" style="width:15em"></colgroup>
|
|
<colgroup span="2" style="width:4em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th class="stubHeading" scope="col">Type of noncash benefit</th>
|
|
<th scope="col"><abbr class="spell">CPS</abbr></th>
|
|
<th scope="col"><abbr>SIPP</abbr></th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="row">None</th>
|
|
<td>17.9</td>
|
|
<td>8.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Energy</th>
|
|
<td>16.9</td>
|
|
<td>7.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Food</th>
|
|
<td>16.0</td>
|
|
<td>7.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Housing</th>
|
|
<td>16.1</td>
|
|
<td>7.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">Energy and food</th>
|
|
<td>15.4</td>
|
|
<td>7.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row">All of the above</th>
|
|
<td>14.2</td>
|
|
<td>6.4</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="3">SOURCES: Author's calculations using the March 1997 Current Population Survey and the 1996 Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="3">NOTE: <abbr class="spell">CPS</abbr> = Current Population Survey; <abbr>SIPP</abbr> = Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>Table <span class="nobr">A-3</span> highlights the effect of including the value of noncash benefits with the combinations of changes in the article. The estimates were calculated according to the methodology currently used in <i>Income of the Population 55 or Older</i> and <i>Income of the Aged Chartbook</i>.</p>
|
|
<p>As with the poverty measure, exclusion of the value of noncash benefits understates the resources available to an individual and thus overstates reliance on Social Security benefits. However, data on the values of noncash benefits are not necessarily available in all surveys.</p>
|
|
<div class="table" id="tableA3">
|
|
<table>
|
|
<caption><span class="tableNumber">Table A-3. </span>Percentage of elderly beneficiaries reporting all income from Social Security, 1996</caption>
|
|
<colgroup span="1" style="width:20em"></colgroup>
|
|
<colgroup span="2" style="width:4em"></colgroup>
|
|
<colgroup span="2" style="width:4em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th class="stubHeading" rowspan="2" scope="colgroup">Unit of observation</th>
|
|
<th class="spanner" colspan="2" scope="colgroup">Excluding noncash benefits</th>
|
|
<th class="spanner" colspan="2" scope="colgroup">Including noncash benefits</th>
|
|
</tr>
|
|
<tr>
|
|
<th scope="col"><abbr class="spell">CPS</abbr></th>
|
|
<th scope="col"><abbr>SIPP</abbr></th>
|
|
<th scope="col"><abbr class="spell">CPS</abbr></th>
|
|
<th scope="col"><abbr>SIPP</abbr></th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Aged unit</th>
|
|
<td colspan="4"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Survey data only</th>
|
|
<td>17.9</td>
|
|
<td>8.5</td>
|
|
<td>14.2</td>
|
|
<td>6.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Survey and administrative data</th>
|
|
<td>17.3</td>
|
|
<td>8.4</td>
|
|
<td>13.8</td>
|
|
<td>6.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Person with family income</th>
|
|
<td colspan="4"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Survey data only</th>
|
|
<td>11.4</td>
|
|
<td>4.8</td>
|
|
<td>9.0</td>
|
|
<td>3.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Survey and administrative data</th>
|
|
<td>11.2</td>
|
|
<td>4.8</td>
|
|
<td>8.9</td>
|
|
<td>3.5</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="5">SOURCES: Author's calculations using the March 1997 Current Population Survey, the 1996 Survey of Income and Program Participation, and Social Security administrative records.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="5">NOTE: <abbr class="spell">CPS</abbr> = Current Population Survey; <abbr>SIPP</abbr> = Survey of Income and Program Participation.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<div id="notes">
|
|
<h2>Notes</h2>
|
|
<p> <a href="#mt1" id="mn1">1</a>. The more recent 2001 panel of <abbr>SIPP</abbr> could be matched to only approximately 60 percent of respondents as opposed to over 80 percent of respondents for the 1996 <abbr>SIPP</abbr>. Matched records will be discussed further in the subsection on administrative data.</p>
|
|
<p> <a href="#mt2" id="mn2">2</a>. Before 2003, the <abbr class="spell">ASEC</abbr> was called the Annual Demographic Survey (<abbr class="spell">ADS</abbr>). The <abbr class="spell">ASEC</abbr> and <abbr class="spell">ADS</abbr> are also commonly referred to as the March Supplement.</p>
|
|
<p> <a href="#mt3" id="mn3">3</a>. This analysis uses the longitudinal core files for waves 1 through 4 of the 1996 panel of <abbr>SIPP</abbr>. For observations that were missing data either because their first interviews did not collect information on January and/or February 1996 or because of the lack of an interview, the income data for the missing months were replaced with the individual's average income for the reported months.</p>
|
|
<p> <a href="#mt4" id="mn4">4</a>. The classification of age 64 as of March 1996 as "65 or older" makes the sample comparable with the <abbr class="spell">CPS</abbr> sample, which is age 65 as of March 1997. March 1996 weights were used for three reasons: (1) March 1996 is the first month in which all rotation groups were interviewed; (2) the 1996 calendar year weights would eliminate observations that had not been present the entire year, making attrition bias a concern; and (3) using the March 1996 weights excludes persons who entered the sample because of their association with an original survey respondent.</p>
|
|
<p> <a href="#mt5" id="mn5">5</a>. Survey records were matched if they had a valid Social Security number and an age within 5 years of the age on the administrative files.</p>
|
|
<p> <a href="#mt6" id="mn6">6</a>. <abbr class="spell">OASDI</abbr> administrative data come from the monthly benefit credited from the Master Beneficiary Record (<abbr class="spell">MBR</abbr>), which is usually, but not always, the amount received by the beneficiary. Other studies have used the Payment History Update System (<abbr class="spell">PHUS</abbr>), which records the actual check amount. Discrepancies may arise between the <abbr class="spell">MBR</abbr> and the <abbr class="spell">PHUS</abbr> when payment for retroactive benefits is issued in a single check. Less than 1 percent of elderly observations had discrepancies between the <abbr class="spell">MBR</abbr> and <abbr class="spell">PHUS</abbr>.</p>
|
|
<p> <a href="#mt7" id="mn7">7</a>. <abbr class="spell">SSI</abbr> administrative data come from the Supplemental Security Record (<abbr class="spell">SSR</abbr>). These records reflect actual payments.</p>
|
|
<p> <a href="#mt8" id="mn8">8</a>. Any state-administered state <abbr class="spell">SSI</abbr> amounts would be replaced with a value of zero during the substitution of administrative data into the <abbr class="spell">CPS</abbr>, resulting in the administrative estimate of <abbr class="spell">SSI</abbr> receipt for the <abbr class="spell">CPS</abbr> being a lower bound.</p>
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<p> <a href="#mt9" id="mn9">9</a>. Table 3 of "The Impact of the Unit of Observation on the Measurement of the Relative Importance of Social Security Benefits to the Elderly" (also in this issue of the <i>Bulletin</i>) shows that married persons and couples are more likely to receive income from sources other than Social Security benefits than are nonmarried persons, except for public assistance and pensions for women. Also, the median income in 2004 ($13,999) for an elderly nonmarried person was less than half ($34,900) that of an elderly married couple (<abbr class="spell">SSA</abbr> 2006).</p>
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<p><a href="#mt10" id="mn10">10</a>. For further discussion of the effects of changes in the unit of observation, see "<a href="/policy/docs/ssb/v67n2/v67n2p41.html">The Impact of the Unit of Observation on the Measurement of the Relative Importance of Social Security Benefits to the Elderly</a>" (also in this issue of the <i>Bulletin</i>).</p>
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<p><a href="#mt11" id="mn11">11</a>. For further discussion of the effects of survey choice, see "<a href="/policy/docs/ssb/v67n2/v67n2p55.html">The Impact of Survey Choice on Measuring the Relative Importance of Social Security Benefits to the Elderly</a>" (also in this issue of the <i>Bulletin</i>).</p>
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<p><a href="#mt12" id="mn12">12</a>. "<a href="/policy/docs/ssb/v67n2/v67n2p55.html">The Impact of Survey Choice on Measuring the Relative Importance of Social Security Benefits to the Elderly</a>" (also in this issue of the <i>Bulletin</i>) provides further comparisons of administrative and reported data for Social Security benefits and <abbr class="spell">SSI</abbr> payments in the <abbr class="spell">CPS</abbr> and the <abbr>SIPP</abbr>.</p>
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<p><a href="#mt13" id="mn13">13</a>. For further discussion on this topic, see "<a href="/policy/docs/ssb/v67n2/v67n2p55.html">The Impact of Survey Error on Measuring Reliance on Social Security Benefits</a>" (also in this issue of the <i>Bulletin</i>).</p>
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<p><a href="#mt14" id="mn14">14</a>. <abbr>SIPP</abbr> is a panel data set that follows respondents for 2½ to 4 years. Many respondents drop out of the survey over time, resulting in attrition bias, which may introduce problems when using sequential years in the same panel for these measures. In addition, the Census Bureau is currently developing another survey to replace the <abbr>SIPP</abbr>.</p>
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<p><a href="#mt15" id="mn15">15</a>. For further discussion on this topic, see "<a href="/policy/docs/ssb/v67n2/v67n2p55.html">The Impact of Survey Error on Measuring Reliance on Social Security Benefits</a>" (also in this issue of the <i>Bulletin</i>).</p>
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<p><a href="#mt16" id="mn16">16</a>. <abbr class="spell">SSA</abbr> maintains records of Social Security benefits, Supplemental Security Income payments, and earnings. Earnings are considered to be federal tax information under the authority of the Internal Revenue Service (<abbr class="spell">IRS</abbr>). The substitution for earnings was not done in this article because earnings data are available annually, not monthly as for Social Security benefits and <abbr class="spell">SSI</abbr> payments. It is unclear how to substitute administrative earnings data across months for persons not in the survey for the entire year or for persons entering or exiting a family unit midyear. In addition, while most earnings are available on the administrative file, there may be other earned income that would be reported on a 1040, but not on a <span class="nobr">W-2</span> or Schedule SE, or informal earnings that would not be reported on any administrative record. Additionally, the receipt of earnings is not misreported as often as is the receipt of <abbr class="spell">SSI</abbr> or Social Security.</p>
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<p><a href="#mt17" id="mn17">17</a>. Noncash transfers enable cash income that would have been spent on goods or services to be used for something else. Even though benefits such as food stamps or energy assistance may be denominated in dollars, that dollar amount may not be the appropriate value for the benefit to the recipient. For example, some recipients may not be willing to pay $100 in cash for $100 in food stamps because they lack the flexibility of cash. The question of value is: How much is $100 in food stamps worth in cash to the individual receiving them?</p>
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<p><a href="#mt18" id="mn18">18</a>. Other types of food benefits, such as free school lunches, are reported in these surveys, but this analysis focuses solely on food stamps and <abbr>WIC</abbr>. <abbr>WIC</abbr> benefits would most likely only be received in an elderly person's family if a younger family member qualified for benefits.</p>
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<p><a href="#mt19" id="mn19">19</a>. Medicare Part A and Medicaid provide nearly universal coverage of medical benefits for aged units 65 or older. Using a dummy variable for coverage would have resulted in 0 percent of elderly aged units receiving all of their income from Social Security.</p>
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</div>
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<div id="references">
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<h2>References</h2>
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<p>Herz, Diane. 1996. <abbr class="spell">CPS</abbr>: Overview. <a href="https://www.census.gov/programs-surveys/cps.html">http://www.bls.census.gov/cps/overmain.htm</a> (last modified May 9).</p>
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<p>Koenig, Melissa. 2003. An assessment of the Current Population Survey and the Survey of Income and Program Participation using Social Security administrative data. Paper presented at the Federal Committee on Statistical Methodology Research Conference, Washington, DC, November 18.</p>
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<p>National Research Council. 1995. <i>Measuring poverty: A new approach</i>, <abbr title="edited by">eds</abbr>. Constance F. Citro and Robert T. Michael. Panel on Poverty and Family Assistance: Concepts, Information Needs, and Measurement Methods, Committee on National Statistics, Commission on Behavioral and Social Sciences and Education. Washington, DC: National Academies Press.</p>
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<p>——— . 2005. Experimental poverty measures: Summary of a workshop. Planning Group for the Workshop to Assess the Current Status of Actions Taken in Response to <i>Measuring poverty: A new approach</i>, Committee on National Statistics, Division of Behavioral and Social Sciences and Education. Washington, DC: National Academies Press.</p>
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<p>[<abbr class="spell">SSA</abbr>] Social Security Administration. 1998. <i>Income of the Population 55 or Older, 1996</i>. Office of Policy, Office of Research, Evaluation, and Statistics. Washington, DC: <abbr class="spell">SSA</abbr>.</p>
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<p>——— . 2006. <i>Income of the Population 55 or Older, 2004</i>. Office of Policy, Office of Research, Evaluation, and Statistics. Washington, DC: <abbr class="spell">SSA</abbr>.</p>
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<p><abbr>U.S.</abbr> Census Bureau. 2000. <i>Money income in the United States: 1999</i>. Current Population Reports, <span class="nobr">P60-209</span>.</p>
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<p>——— . 2005. <i>Survey of Income and Program Participation users' guide</i>. <a href="https://www.census.gov/programs-surveys/sipp/guidance/users-guide.html">http://www.sipp.census.gov/sipp/usrguide/sipp2001.pdf</a> (accessed April 12).</p>
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<p>——— . 2007. Introduction to <abbr>SIPP</abbr>: Comparison of <abbr>SIPP</abbr> with other surveys. Survey of Income and Program Participation. http://www.sipp.census.gov/sipp/vs.html (accessed January 22).</p>
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