Does Social Security Reduce Poverty?

October 18, 2016

This question came up in class: does Social Security reduce poverty among the elderly?  We had noted that poverty rates are lower for Americans over 65 than they are for adults 18 to 64, and highest overall for children.  One answer to the question about whether Social Security reduces poverty comes from a 2004 paper by Gary V. Engelhardt and Jonathan Gruber.  Here’s the key graph from their paper:

elderly-poverty-and-social-security-expenditures

Over time, as Social Security expenditures per capita went up, the percentage of seniors below the poverty line went down, and at strikingly similar rates.

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