Abstract
Major life changes such as job loss, decline in health, divorce, or death of a spouse can have pronounced and long-lasting negative effects on individuals’ and households’ well-being. These events may be especially disruptive when they occur at older ages. The United States and most other industrialized nations have long provided some form of social protection to individuals and households to help insure against the risk and actuality of these events. The peer-reviewed articles in this special issue are a collection of new, innovative research on these risks, and the social insurance programs designed to mitigate their adverse consequences.
The research was first presented at the conference “Social Insurance and Lifecycle Events Among Older Americans.” The conference was sponsored by American Association of Retired Persons and held at their national headquarters. The presenters focused on career, family, and health changes encountered by older Americans and the responsiveness of current policies and programs to those events. The scholars considered the interrelationships among these areas (career, family, and health) and new policy approaches for a changing demographic, political, and economic environment.
Career and Job Patterns
“Late Career Job Loss and Retirement Behavior of Couples” (Lee, this issue) shows that following a job loss late in one’s working life, adjustments to resource losses often involve altered patterns of labor force activity among other members of the family. The change in work of family members serves as self-insurance against the unexpected event, as does changes in the timing of application for receipt of Social Security Retirement Benefits. Thus, job changes and career adjustments interact with family structure and public insurance receipt.
When older workers are displaced, one concern is discrimination in reemployment particularly if the workers have functional limitations. “Does Protecting Older Workers from Discrimination Make It Harder to Get Hired? Evidence from Disability Discrimination Laws” (Neumark, Song, & Button, this issue) considers whether costs to the firm from disability workplace protections reduce hiring of older workers. They find no evidence of this type of impact.
The percentage of self-employed workers rises rapidly with age. Given the historic relationship between employment and health insurance, a related policy interest is the extent to which nonemployer provision of health insurance alters work choices of older workers. “The Impact of Medicare Part D on Self-Employment” (Moulton, Diebold, & Scott, this issue) looks at this issue among older (ages 65–69) workers, examining variation in employment choices as Medicare Part D was implemented. They find the introduction of Part D increased self-employment among older workers. The analysis highlights the links between public policy and work patterns among older Americans.
Changes in Family Structure
Family relationships and their interplay with available financial resources have a large impact on multiple dimensions of well-being in late life. “Marital Biography, Social Security Receipt, and Poverty” (I-Fen, Brown, & Hammersmith, this issue) highlights the relationship between the marital relationships experienced in life, relationship status at age of eligibility for Social Security Retirement Benefit receipt, and vulnerability in old age. Their analysis shows that those who reach the age of initial eligibility in a relationship are far less financially vulnerable than those who are currently single, particularly among those who divorced late in life or who were never married.
“Living Arrangements of Mothers and Their Adult Children Over the Life Course” (Wiemers, Slanchev, McGarry, & Hotz, this issue) further highlights the complexity of family relationships and financial vulnerability in the lives of women. The analysis highlights the beneficial financial role that coresidence with parents typically has for children. However, as parents age, their dependence on benefits from social insurance places strain particularly on the households that contain children with functional limitations who have never left the parental home.
Poverty among older Americans is concentrated disproportionately among divorced and widowed women. “The Distributional Impact of Social Security Policy Options: An Analysis of Divorced and Widowed Women” (Reznik, Couch, Tamborini, & Lams, this issue) makes use of a sophisticated microsimulation model to examine three types of policy proposals which might be expected to providing more benefits to divorced or widowed women. The proposals include (1) allowing easier qualification for spousal retirement benefits than allowed under current policy, (2) to share credits for earnings equally during years of marriage, or (3) to adjust benefits to reflect evolving life expectancies in the United States. Their analysis shows that adjusting benefits to reflect changing life expectancies tends to benefit widows the most while making it easier to receive spousal benefits tends to benefit divorced women the most. The analysis highlights the complex patterns between family relationships, the Social Security Retirement Benefit system, and late life well-being.
“Raising the Social Security Entitlement Age: Implications for the Productive Activities of Older Americans” (Blaylock, Zissimopoulos, Goldman, & Rowe, this issue) also uses a dynamic microsimulation model to consider the impact of a possible increase in the full retirement age and initial eligibility age for Social Security Retirement Benefits on work and nonmarket productive activities. Importantly, the analysis concludes that not enough additional work effort would be induced by a 2-year increase in the age of initial eligibility for retirement benefits to provide a net improvement in the fiscal solvency of the program despite the popularity of this particular policy proposal.
Health Limitations
Limitations to the activities people can perform impact multiple dimensions of their lives including work and relationships. “Accounting for the Process of Disablement and Longitudinal Outcomes Among the Near Elderly and Elderly” (Rupp & Dushi, current issue) develops measures of disability that are used to track individuals aged 51–61 over the next 20 years of their lives. The emphasis of the analysis is on showing how selective mortality among those considered disabled should be explicitly considered by analysts working on this topic: They demonstrate that being disabled is associated with long-term reductions in financial security.
The work of Wallace, Haveman, and Wolfe (current issue), “Health Status, Health Shocks, and Asset Adequacy Over Retirement Years,” considers the question of whether sharp shocks to the health status of individuals during retirement has long-term impacts on financial security of individuals, particularly household assets. Their analysis shows that individuals rarely fully recover from large acute shocks to their health and that this typically results in substantial reductions in the household’s wealth.
Declines in functioning important to work often occur as retirement approaches. The authors of “Employment Support for the Transition to Retirement” (Stapleton & Schimmel, current issue) argue that current policy approaches to disability appropriately provide medical and income support but could be usefully modified to support continued work among those experiencing work limitations. They describe a system of intervention in the lives of those experiencing work limitations that would allow them to continue in employment rather than immediately transitioning out of the labor force. The policy proposal would reduce poverty, the extent of current reliance on public insurance as a response to work disability, and related program outlays.
As a set, these articles that focus on career, family, and health domains of individual’s lives, how they evolve and interact with social insurance programs over time, underscore the complexity of aging policy. Negative shocks to these domains may be mitigated or aggravated by the behavior of individuals, families, employers, and the government. Rigorous scholarship can aid in informing policies to promote well-being and reduce risks as individuals age. We invite scholars from across disciplines and fields to join this important area of research.