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69 Soc. Sec. Bull. 1 (2009)

handle is hein.journals/ssbul69 and id is 1 raw text is: EARNINGS SHARING IN SOCIAL SECURITY: PROJECTED IMPACTS OF ALTERNATIVE PROPOSALS USING THE MINT MODEL by Howard M. Iams, Gayle L. Reznik, and Christopher R. Tamborini* Changes in American family and work patterns over the past decades have prompted various policy proposals for changing the structure of Social Security benefits. In this article, we use the Social Security Administra- tion's Modeling Income in the Near Term (MINT) microsimulation model to project how Social Security benefit amounts would change in response to incorporating earnings sharing into benefit calculations for the population aged 62 or older in 2030 under three hypothetical policy scenarios. The earnings sharing scenarios modeled in the article would reduce benefits for the majority of individuals, although there are important differences among married, divorced, and widowed individuals. Some groups of men and women would experience increases in Social Security benefits, while some would receive reduced benefits in comparison to current law, particularly widowed individuals. Allowing widows to inherit the earnings records of their deceased husbands would improve their outcomes. Summary This article provides policymakers and retirement analysts with insights into the potential distributional effects of incorporating earnings sharing in the calcula- tion of Social Security benefits. Earnings sharing refers to a system whereby the earnings records of married individuals are combined and split equally for each year of marriage for the purpose of calculating each individual's Social Security benefit. Incorporating earn- ings sharing has been proposed as one way to adapt the Social Security program to socioeconomic and demographic changes over the last few decades, such as changes in women's work and marriage patterns. Using the Social Security Administration's Model- ing Income in the Near Term (MINT) microsimulation model, we estimate the impact of earnings sharing on Social Security benefits for the projected retire- ment population aged 62 or older in 2030 under three hypothetical policy proposals: earnings sharing with no auxiliary survivor or spousal benefits, earnings sharing with survivor benefits only, and earnings shar- ing with survivor and spousal benefits. We exclude any additional benefit enhancements from the three proposals to focus on the fundamental effects of basic earnings sharing on future retirees. In evaluating the desirability of earnings shar- ing, it is important to consider how the policy would affect different segments of the retiree population. Overall, the earnings sharing scenarios analyzed in this article would lead to benefit decreases relative to current-law Social Security benefits for the majority of future retirees. Results differ, however, among mar- ried, divorced, and widowed individuals. For married individuals, over a third would receive Social Security benefit increases, and about half would receive ben- efit decreases under basic earnings sharing with no * Howard M. Jams is a Senior Research Advisor to the Office of Research, Evaluation, and Statistics (ORES), Office of Retirement and Disability Policy (ORDP), Social Security Administration (SSA). Gayle L. Reznik and Christopher R. Tamborini are with the Office of Retirement Policy (ORP), ORDP, SSA. Social Security Bulletin * Vol. 69 * No. 1 * 2009 1

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