The Retirement and Disability Research Consortium (RDRC) was established by the U.S. Social Security Administration in 2018. The CRR receives support under the RDRC to conduct and disseminate research along with its partner organizations: Mathematica – Center for Studying Disability Policy, Syracuse University, the Urban Institute, and the Brookings Institution.
Other organizations funded through the RDRC include:
- Michigan Retirement Research Center
- National Bureau of Economic Research
- University of Wisconsin-Madison
Our current projects for FY2019:
1. “What Is the Extent of Opioid Use among Disability Insurance Applicants?”
by April Yanyuan Wu and Denise Hoffman, Mathematica Policy Research and Paul O’Leary, U.S. Social Security Administration
This study will use data from SSA’s Structured Data Repository (SDR) to document trends in opioid use among applicants to disability insurance (DI) and the extent to which opioid use is predictive of initial award, an award within five years, and mortality. The findings will inform SSA’s projections about future program entry based on aggregate trends in opioid use. The rise in opioid use nationwide – coupled with the numerous DI applicants who have conditions associated with opioid use, such as musculoskeletal problems – suggests that opioid use may be common and increasing among DI applicants. Beneficiaries cannot qualify for DI on the basis of drug addiction, but opioid use may exacerbate the effects of other conditions that meet DI qualifications. This study will address a major data issue that limits what is known about opioid use among DI applicants. Applicants are required to report their medications, but medications are recorded as a combination of coded and open-ended text fields. This study will capitalize on a previously developed supervised machine-learning algorithm to identify opioids recorded in freeform text and combine that information with opioids identified in populated medication codes.
2. “How Does the Decline in the Employment of Prime-Age African-American Men Affect OASDI?”
by Gary V. Engelhardt, Syracuse University
This project examines how the rise of incarceration of African-American men has affected labor force participation, employment-to-population rates, and earnings, using data from the 2006-2016 waves of the American Community Survey (ACS) and from the U.S. Bureau of Justice Statistics (BJS) on prisoners in federal, state, and local correctional facilities. The findings have implications for both Social Security solvency and benefit adequacy. Age-adjusted labor force participation and employment-to-population ratios in the United States are at low levels, while incarceration rates have been very high, both by historical and international standards. A large literature in economics and sociology suggests that encounters with the criminal justice system have a significant lifetime scarring effect on future employment and earnings, especially for African-Americans, and, by extension, should have an important impact on taxes paid, quarters of coverage, insured status, and covered earnings for the purposes of determining eligibility for and generosity of OASDI benefits.
3. “Why Are 401(k)/IRA Balances Substantially Below Potential?”
by Andrew G. Biggs, American Enterprise Institute and Alicia H. Munnell, Boston College
This project uses data from the Survey of Consumer Finances (SCF) and the Survey of Income and Program Participation to estimate the role of four factors in explaining why 401(k)/IRA balances fall below their potential: 1) inconsistent contributions; 2) leakages; 3) fees; and 4) the immaturity of the 401(k) system. The wealth held in these plans (or transferred from 401(k)s to IRAs) will be the primary complement to Social Security income for future retirees. Therefore, it is concerning that the median worker with a 401(k) plan is approaching retirement with only $104,000 in combined 401(k)/IRA savings – yet, a hypothetical 60-year-old worker with a plan who had saved consistently could have had over $350,000. This proposal explores a basic question: what is the source of this savings gap? While the culprits are likely the four factors listed above, their relative importance is less clear. The source of the gap between hypothetical and actual savings is important, because factors like the system’s immaturity will dissipate, while inconsistent contributions could continue without any action by plan sponsors or policymakers.
4. “How Much Will Auto-IRA Leakages Reduce Retirement Saving?”
by Anek Belbase and Geoffrey T. Sanzenbacher, Boston College
This project explores the level and reasons for leakages out of Oregon’s new “Auto-IRA” program using administrative data from the program’s record-keeper and a survey of participants. SSA has an interest in understanding how state-sponsored Auto-IRA programs affect assets available at retirement since they address one reason low-income workers become reliant on Social Security – the lack of access to easy saving through employer-sponsored plans. This reliance means that reforms to restore financial stability to Social Security by reducing benefits – like further increases in the Full Retirement Age – will have an outsized impact on uncovered workers. Expanding employer-based retirement vehicles to workers who currently lack them could lessen the impact of any such policy, but only if the savings are not depleted before retirement. While a number of studies have examined leakages from traditional 401(k) plans, it is unclear whether auto-IRA participants will behave in a similar manner. Leakages can significantly erode balances, and workers covered by auto-IRAs may be more likely to leak than workers with traditional 401(k)s because they tend to experience more frequent job transitions; they have more pressing financial needs; and the Roth-IRA structure has no penalty for withdrawing contributions.
5. “How Has Racial/Ethnic Inequality of Retirement Wealth Increased across Cohorts?”
by Geoffrey T. Sanzenbacher and Wenliang Hou, Boston College
This project uses improved data on employer-sponsored retirement plans from the Health and Retirement Study (HRS) through 2016 and links them to Social Security earnings and benefit records to document the retirement resources of white, black, and Hispanic households for five HRS cohorts. As the U.S. population continues to become more diverse, it will be increasingly important for policymakers addressing Social Security’s solvency to understand how reliant various racial and ethnic groups will be on the program versus other sources of retirement wealth.
Yet, to date, studies on retirement wealth have tended not to focus on race and ethnicity, have largely ignored the role of Social Security, have excluded the most recent cohort approaching retirement – the Late Boomers – and have not had access to recently refined data on employer-sponsored plans. Understanding the distribution of retirement wealth among various racial and ethnic groups can inform discussions of how addressing Social Security solvency may affect their retirement security.
6. “Are Homeownership Patterns Stable Enough to Tap Home Equity?”
by Alicia H. Munnell, Anek Belbase, and Abigail Walters, Boston College
This project will use the Health and Retirement Study and sequence analysis to identify typical housing trajectories in retirement and explore how often, and for whom, tapping home equity will be a viable strategy. Social Security has an interest in understanding what other sources of retirement income households have, and for many, equity is a large part of their savings. The most direct means of accessing home equity is downsizing, but few choose this option. The other option is staying in the house and withdrawing equity through either a reverse loan or a property tax deferral. Both of these approaches involve loans that must be repaid upon selling the house. Thus, for borrowers who are likely to move frequently, these approaches may be less viable due to the transaction costs and required loan repayments. While a number of studies have examined year-to-year housing transitions in retirement, they have not examined how often, at what age, and to what types of houses retirees typically move. To identify the number and characteristics of households with housing trajectories stable enough to tap home equity through borrowing, this project will examine housing mobility of individuals over an entire retirement period.
7. “How Will Automation Affect Retirement Security?”
by Anek Belbase and Alice Zulkarnain, Boston College
This project will produce three issue briefs that will review the extensive literature – recent and long-standing – on labor-saving technologies and labor markets, especially as it relates to older workers. As workers increasingly need to work longer to secure an adequate retirement, SSA has an interest in understanding how automation will impact their ability to do so. From the cotton gin to the automated assembly line, machines have taken over tasks that humans had done for centuries. Each time, despite a short-term loss of jobs in some occupations, enough new jobs were created in the long run to employ willing workers. But this time seems different. With “superhuman” robots now filling the role of driver, barista, and radiologist, few occupations seem safe from machines. As the labor force ages, more workers seem especially vulnerable to technology-driven unemployment. A number of recent studies have projected the impact of automation on the demand for workers, but they do not separately examine the potential impact on older workers. Differences in assumptions and projection methods also lead to a wide range of projections, which can be confusing to a lay audience. The goal of this issue brief series is to assess the potential impact of automation on the job prospects of older workers and communicate the findings to lay people.
8. “How Does the Minimum Wage Affect DI Participation?”
by Gary V. Engelhardt, Syracuse University and Patrick J. Purcell, U.S. Social Security Administration
This project uses rich administrative SSA data on earnings, location, and DI applications and awards to examine how DI participation responds to changes in the minimum wage. While considerable debate exists regarding the relative contributions of demand-side, supply-side, and institutional factors in explaining the decline in work in America among prime-age individuals, one fact is clear: the long-term decline in the relative wages of low-skilled workers has made DI more attractive than labor force participation for some individuals, and has been shown to be an important factor in the long-term growth of the DI program. Existing industry-specific studies, such as of the coal boom and bust in Appalachia and the oil boom and bust in the Bakken Basin, have demonstrated the extent to which local labormarket conditions affect DI applications and awards. However, comparatively less attention has been focused on how changes in the minimum wage – a key policy instrument used to address, in principle, earnings inequality – change the relative attractiveness of DI and labor force participation. This project addresses this gap in the literature.
9. “How Does Irregular Scheduling Affect the Employment of Young Adults with Disabilities?”
by Purvi Sevak and Dara Lee Luca, Mathematica Policy Research
This project will use data from the 1997 National Longitudinal Survey of Youth to examine the implications of the proliferation of gig employment and jobs with irregular scheduling on workers ages 18-36 who have disabilities. Trends in labor force participation for young adults with disabilities may signal future DI benefit claiming patterns. Changes in the labor market including alternative work arrangements in the gig economy and “just-in-time” scheduling” have introduced significant volatility in household incomes by creating more uncertainty in schedules, hours worked, and earnings, particularly for the working poor and young adults (Hannagan and Morduch 2015; Lambert, Fugiel, and Henly 2014). Although the flexibility of the gig economy and the challenges created by unpredictable schedules and earnings have been documented by the media, little is known about how these changes affect people with disabilities. For some young people with disabilities, such changes could make working less attractive than receiving DI benefits. But for others, the availability of a job with more flexible hours could have the opposite effect.
10. “Does Employer Concentration Affect Labor-Force Participation?”
by Anqi Chen, Laura D. Quinby, and Gal Wettstein, Boston College
Labor-force participation (LFP) of prime-age workers – an important factor in the actuarial projections of the OASI program – has declined secularly since 2000. Simultaneously, an accumulation of evidence suggests that the concentration of employers in local labor markets has increased, giving firms greater bargaining power in employment negotiations and potentially driving down LFP. The aim of this project is to examine whether markets with higher employer concentration have substantially lower LFP, and whether the relationship is stronger for employees with less bargaining power, such as the less-educated and the non-unionized.
Although a large literature examines the factors affecting prime-age LFP, the recent decline is not fully understood. Simultaneously, a parallel line of research suggests that employer concentration slows real wage growth, but the effect of employer concentration on LFP itself has been understudied. By linking these two phenomena, this project will promote a better understanding of the drivers of prime-age LFP. To analyze the relationship between employer concentration in local labor markets and prime-age LFP, this project will combine data from the Longitudinal Business Database, the Local Area Employment Database, and the American Community Survey.
11. “Examining Mortality and Receipt of Benefits Administered by SSA as Reasons for Desistance from Homelessness among Older Adults”
by Matthew S. Rutledge, Boston College, Dennis Culhane, University of Pennsylvania, and Thomas Byrne, Boston University
The study links data from the emergency shelter systems in several large American cities with SSA data to investigate the pattern of desistance from homelessness among those in the age cohort who have been disproportionately impacted by homelessness for over 20 years and who are now approaching retirement age. The specific research questions to be addressed by the study are as follows: 1) To what extent does mortality contribute to the observed pattern of desistance from homelessness among older adults?; 2) How does premature death impact the ability of persons with a history of homelessness to receive Social Security retirement benefits? To what extent do individuals with earnings histories that would render them eligible for Social Security retirement benefits die prior to reaching the statutory age for claiming these benefits?; and 3) To what extent do older homeless adults receive Social Security retirement benefits, SSDI and SSI? Does receipt of these benefits help facilitate exits from homelessness?