Young Widow(er)s, Social Security, and Marriage

Abstract

The Social Security program, like the federal income tax system, is not marriage neutral. In the income tax literature, when a couple faces a higher (lower) tax bill as a married couple than as two single individuals, it is said that the couple, in effect, faces a marriage penalty (marriage subsidy). Similarly, provisions in Social Security lead to marriage subsidies or penalties. In this paper, we examine marriage penalties associated with Social Security’s child- in-care benefits. These benefits are paid to widow(er)s who are caring for minor or disabled children. Benefits to the widow(er) terminate upon remarriage, giving rise to marriage penalties. We document the size of these penalties, discuss their likely effects on marriage decisions, and measure the cost of repealing the termination provision.