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Working Paper Number SEHSD-WP1988-22 or SIPP-WP-96
Susan Grad
Component ID: #ti1172742683

The wealth of data in the Survey of Income and Program Participation provide a unique opportunity to identify major types of Social Security beneficiaries and to characterize their relative socioeconomic status. Five types of beneficiaries are identified: the two types of worker beneficiaries (retired workers and disabled workers), and the three major groups with benefits based on someone else’s work record (aged wives, aged widows, minor children). The different types of beneficiaries face very different economic circumstances. Retired workers and wife beneficiaries have the highest family incomes adjusted for family size. Aged widows and minor children have the lowest family incomes, with high proportions of poor and near poor. And disabled workers are in between, but also have high proportions of poor and near poor. Beneficiaries with high family incomes are very likely to live with relatives and to rely heavily on the relatives' income, including substantial income from non-means-tested sources other than Social Security. Beneficiaries with low family incomes are very likely to live alone or with nonrelatives, to rely heavily on Social Security and means-tested benefits, and to have low asset holdings. Poverty among beneficiaries tends to occur in only some months of a year, often because of income changes of other family members.

The Survey of Income and Program Participation (SIPP) is a major new household survey conducted by the Bureau of the Census. It collects a great deal of demographic and economic data longitudinally through a set of core questions asked every 4 months over a 2-1/2 year period and topical modules containing questions on various special topics. During the interviews, information is obtained about each of the previous 4 months. Through this design, the SIPP provides more reliable and comprehensive information about annual and subannual sources of income received than has been available in the past. In addition, the SIPP collects data on many topics not generally available from regular household surveys.

The wealth of data on economic status collected in the SIPP make it an especially valuable resource for studying the social and economic circumstances of Social Security beneficiaries and of the larger population from which beneficiaries come. Social Security benefits are a very important source of income to those who receive them. But Social Security was intended as a floor of protection, to be supplemented by other sources such as income from assets, employer pensions, earnings (subject to an earnings test), or means-tested benefits. To assess Social Security's role in income security, information is needed on the extent to which beneficiaries and their families have sources of income other than Social Security, and the resulting level of total income and level of reliance on Social Security benefits.

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