Toward a demographic divide? Equity, race, and Social Security

The retirement system within the United States for millions of Americans revolves around Social Security. Social Security is a policy that was designed to ensure economic security to individuals who contributed into the system while working and now have transitioned into retirement. Yet, the combination of conflicting goals, demographic trends, and inadequate assumptions in the design of the Social Security program has threatened its solvency. With these concerns have come various proposals to reform the system, including increasing the retirement age and privatizing the Social Security program. These proposals have spurred social equity concerns regarding the potential adverse impacts on the ability of minorities and/or low-income individuals to retire. While race is typically proffered as social equity concerns when it comes to Social Security and its accompanying reforms, it is possible that this cleavage is not the most important one for policy makers to anticipate and attempt to cope with in the future. As a result, this study seeks to address the following questions in more rigorous, robust, and sophisticated ways than has prior research: Are there differences by race in retirement decisions, controlling for other factors such as class? If differences do exist, what are their social equity implications for society? How might any social inequities that might exist be best addressed in the United States?; To address these questions, this study combines qualitative as well as quantitative research using the Health and Retirement Study (HRS) to examine, from 1992 to 2004, the retirement behaviors of Americans born between 1931 and 1941. Logistic regressions were used to decompose the differences in retirement decisions across racial groups while controlling for demographic, economic, and quality of life factors. The analysis revealed that, controlling for economic and health variables, statistically significant differences among races in retirement decisions did not exist. Overall, this study suggests that the most important focus of policymakers seeking the most cost-effective way to address social inequities related to retirement decisions is to focus proactively on ways to address poverty and poor health, and reactively, to focus social services on attenuating the worst impacts of social inequities.