The most incisive guide to issues facing the American family today . . . An invaluable resource for anyone wishing to stay on the cutting edge of research on family trends.

-W. Bradford Wilcox
Associate Professor of Sociology, University of Virginia 

Don’t Mess with Social Security

Bryce J. Christensen and Robert W. Patterson

Ever since married mothers started working outside the home in larger numbers, public attention has focused on how to make life easier for these relatively privileged women—not for their conventional sisters doing the messy work of raising a brood of children at home. Even though the former have higher educational levels, higher household incomes, and fewer children than at-home moms, the push continues for daycare subsidies and afterschool programs, universal preschool, as well as flexible-leave policies in the workplace. Now the drumbeat is for changing the benefit structure of Social Security, which since 1939 has acknowledged the vital but unpaid work of at-home mothers by providing both spousal and survivor benefits, even when a married woman has only indirectly paid into the system through her husband’s earnings.

Because the pro-family orientation of Social Security represents a disincentive for married women to work outside the home (and contribute to the system directly), a trio of scholars led by Andrew Biggs, who served as a George W. Bush appointee to the Social Security Administration, cries foul in a paper published by the Center for Retirement Research at Boston College. Although the researchers don’t directly attack the spousal benefit, their entire study—which measures how Social Security treats the individual in terms of what he or she pays directly into the system and what he or she receives in benefits—appears driven by a contrived inequity: that a married mother who never worked outside the home (or directly contributed to the system) can receive the same benefit as a married mother who did.

Troubled by the fact that a mother working outside the home, particularly when her earnings are modest, does not receive anything more in benefits than the at-home mother is reflected even in the study’s methodology. To capture that alleged injustice, Team Biggs introduces a new unit of measurement, the generated net-tax rate, or the net value of benefits, including spousal and survivor benefits, received in return for a participant’s taxes relative to lifetime earnings. The scholars claim this measure is an improvement over the more commonly used net-tax rate, which reflects the net value of Social Security taxes and benefits as a percentage of lifetime earnings, for measuring incentives for married women to work outside the home and contribute to the system.

According to their calculations, married women pay low and even negative average net-tax rates but generated net-tax rates to Social Security “well in excess of their ordinary net taxes.” The pattern for married men is just the reverse because their earnings generate benefits for wives. Moreover, they predict that if the earnings of women continue to rise, which will increase the percentage of married women claiming benefits based on their own earnings, that pattern will exacerbate the disparity between married men and women and only “worsen incentives [for married women] to participate in the labor force.”

Biggs and company therefore propose capping widow benefits for high-earning households and increasing the widow’s benefit from 50 to 75 percent of the total benefits received by a married couple when both spouses were alive. While a full analysis of both proposals is needed, they appear to be just another misguided effort to encourage more mothers to betray the home and join the full-time labor force. That may be good for Big Business and Big Government but terrible for the economy that really matters: the family.

(Andrew G. Biggs, Gayle L. Reznik, and Nada O. Eissa, “The Treatment of Married Women by the Social Security Retirement Program,” Center for Retirement Research at Boston College, Working Paper 2010-18, November 2010.)