Evaluating the Impact of Social Security Benefits on Health Outcomes among the Elderly

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by Padmaja Ayyagari, University of Iowa

Given concerns about the depletion of the Social Security Trust Fund, U.S. policymakers
are considering several proposals that aim to improve the financial sustainability of the program. Some of these proposals, such as indexing benefits using the chained Consumer Price Index, would lower benefits over time. The extent to which reductions in Social Security benefits impact individual health and well-being is not well understood. In this study, we propose to examine the impact of changes in Social Security income on a broad range of health outcomes among the elderly. Income has been shown to be positively associated with health but it is still uncertain whether this is a causal relationship or whether the results from prior work would generalize to changes in Social Security income. We plan to use a quasi-experimental approach that examines the impact of benefit reductions due to amendments to the Social Security Act in 1977. Our study focuses on important aspects of health which are associated with aging populations and increased health care expenditures, including cognitive functioning, depression, disability, cardiovascular health and self-rated health.

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