Social Security Reform: Improving Benefit Adequacy and Economic Security for Women

Timothy M. Smeeding

WP#1999-8

Abstract

This Policy Brief is designed to raise awareness of the current and future economic circumstances of older women, and the ways in which Social Security reform can help alleviate their unmet needs. It considers the gaps in benefit adequacy and economic security that are not addressed by current Social Security reform proposals and then suggests a series of modest, low-cost reforms to help close these gaps. If our proposals are adopted, Social Security reform will not only close the long-run financial deficit, but it will also greatly reduce the future poverty status of older women, particularly those who live alone. This is an opportunity for progressive reform as well as for budgetary balance.

The Social Security program was designed over 60 years ago for a world in which mothers worked at home, raised children, and were widowed young, but not divorced; where fathers worked in industrial settings; and where both men and women had much shorter life expectancies at older ages than those of succeeding generations. Back in 1935 the founders of Social Security did not anticipate that women would become the major beneficiaries of the program. Increasingly, women rely on Social Security as the major source of their economic security at older ages, much more so than do men. Therefore, women are the group with the most to gain or lose from reform of the Social Security system and modification of its benefit formulae.

Future women beneficiaries will be different. Women’s lives are changing rapidly in many ways. More women work outside the home today, and about half of all marriages end in divorce.

Increasing numbers of children grow up in a single-parent family, typically that of the mother. The higher future benefits expected for women with their own careers in the labor market need to be balanced against the potentially bleak economic situation in old age for a large and growing number of divorced and never married women.