This paper compares Social Safety outcomes for non-Hispanic Black, Hispanic, and non-Hispanic white beneficiaries and assesses the capability of varied profit enhancements to slim racial and ethnic disparities in Social Safety advantages. Utilizing the Dynamic Simulation of Revenue Mannequin 4 (DYNASIM4), we mission, beneath present regulation and every profit enhancement, lifetime Social Safety advantages, the share of beneficiaries receiving restricted annual advantages, and the share with restricted annual revenue. To seize the absolutely phased-in impression of every possibility, we mission annual outcomes in 2080 and lifelong outcomes for adults born between 2001 and 2010.
The paper discovered that:
- Racial and ethnic variations in annual and lifelong Social Safety advantages are substantial. We mission that common lifetime advantages obtained by adults born between 2001 and 2010 paid to beneficiaries ages 62 and older in 2080 are 19 % much less for Black beneficiaries than white beneficiaries and 14 % much less for Hispanic beneficiaries than white beneficiaries. Black and Hispanic beneficiaries ages 62 and older in 2080 are projected to be about 10 share factors extra prone to obtain restricted incomes in 2080 than white beneficiaries.
- Numerous profit enhancements, together with creating caregiver credit, making the profit system extra progressive, and including a brand new minimal profit to Social Safety, would disproportionately assist Black and Hispanic beneficiaries.
- Nonetheless, these profit enhancements would solely modestly slim racial and ethnic disparities in Social Safety advantages. Including a brand new minimal profit tied to years of lined employment would have a very modest impact, as a result of comparatively few beneficiaries receiving restricted advantages full lengthy careers.
The coverage implications of the findings are:
- The effectiveness of profit enhancements relies upon crucially on how these changes are structured. Coverage particulars, together with eligibility for the improved profit and the presence of any profit caps, form how a lot low-income beneficiaries would obtain and the way nicely focused the changes are.
- Reaching fairness in Social Safety advantages for Black and Hispanic adults would seemingly require substantial progress towards equality in labor market outcomes.