Living Arrangements and Supplemental Security Income Receipt Among the Aged

Melissa M. Favreault Douglas A. Wolf

WP#2004-3

Abstract

Declines in health and financial resources lead many older Americans to turn to coresidence and the Supplemental Security Income (SSI) program for support. A growing literature examines coresidence choices and SSI participation, stressing the importance of each for vulnerable aged persons. Little research, however, considers how these processes intersect. Because SSI provides Medicaid access but reduces benefits if one shares a residence, the program alters both the necessity of and the incentives for coresidence. We explore interactions between SSI participation and living arrangements by developing two joint models of the two decisions for members of the SSI-eligible population. In these models, we express the probability of SSI receipt and living with kin and joint SSI-living arrangement states as functions of individual and family attributes. We estimate model parameters using data from the 1990 to 1993 panels of the Survey of Income and Program Participation (SIPP) matched to administrative records on earnings and program participation. Our results provide tentative support for the hypothesis that these two processes should be considered jointly.