Understanding How Interactions among Certain Provisions in OASDI Solvency Packages May Thwart Financing and Distributional Goals
Analysts often compile packages of Social Security changes based upon publically available projections of individual provisions’ effects. Such analyses may neglect issues of whether and how provisions might interact to alter intended outcomes, thwarting the proposal’s financing and distributional goals. To inform policymakers about such interactions’ importance for examining cost and distributional implications, we catalog a range of possible interactions, including some that are subtle and not well understood. Using data on U.S. workers from the Survey of Income and Program Participation matched to administrative records, we document a number of patterns in work and benefit histories to show how many commonly discussed Social Security proposals would affect different population groups. We then use DYNASIM, the Urban Institute’s dynamic microsimulation model, to measure how accounting for interactions among a few of these provisions change projections of distributional effects.