It Sucks to Be Single! Marital Status and Redistribution of Social Security

Max Groneck, Johanna Wallenius*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

In this paper, we study the labour supply effects and the redistributional consequences of the U.S. social security system. We focus particularly on auxiliary benefits, where eligibility is linked to marital status. To this end, we develop a dynamic, structural life cycle model of singles and couples, featuring uncertain marital status and survival. We account for the socio-economic gradients to both marriage stability and life expectancy. We find that auxiliary benefits have a large depressing effect on married women’s employment. Moreover, we show that a revenue neutral minimum benefit scheme would moderately reduce inequality relative to the current U.S. system.

Original languageEnglish
Pages (from-to)327-371
Number of pages45
JournalEconomic Journal
Volume131
Issue number633
Early online date17-Jun-2020
DOIs
Publication statusPublished - Jan-2021
Externally publishedYes

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