African Americans: Description of Social Security and Supplemental Security Income Participation and Benefit Levels Using the American Community Survey

Introduction

African Americans encounter significant economic disadvantages, making them a critical focus for social insurance programs. Examining how the African American population uses Old-Age, Survivors, and Disability Insurance (OASDI, or Social Security) benefits and Supplemental Security Income (SSI) payments clarifies the role these programs play in supporting at-risk populations.

Earlier research has explored various facets of the relationship between Social Security and African Americans. For instance, many studies investigate African Americans' low retirement benefit receipt rates relative to whites (Abbott 1977, 1980; Thompson 1975; Huntley 1979; Parsons 1980; Gibson 1987, 1991, 1994; Farley 1988; Hayward, Friedman, and Chen 1996; O'Rand 1996; Gendell and Siegel 1996; Choi 1997; Hendley and Bilimoria 1999; Gustman and Steinmeier 2004; Bridges and Choudhury 2007, 2009; Favreault 2010). Others examine the prominent role of children's benefits for African Americans (Newcomb 2003/2004; Tamborini, Cupito, and Shoffner 2011). This analysis contributes to that body of research by using a relatively new, publicly available, and comprehensive data source, the American Community Survey (ACS), to document the demographic and economic characteristics of African American OASDI beneficiaries and SSI recipients. It is designed to lay the groundwork for future detailed analyses of how African Americans interact with Social Security and related programs.

In this note, we first discuss the strengths of the ACS and the methodology of this analysis. Next, we present the demographic and economic characteristics of the African American population in the 2009 ACS. Then, we present ACS data on OASDI and SSI participation and benefit levels, comparing African American participants with overall participants in three age distributions: the full age range for which benefit statistics are available in the ACS (15 or older), working age (18–61), and retirement age (62 or older).

Data and Methodology

The Census Bureau developed the ACS to provide data previously collected on the long form of the decennial census.¹ Researchers can acquire detailed ACS data on income, race and ethnicity, and other economic and demographic variables through the survey's Public Use Microdata Sample (PUMS), a subset of the full ACS sample. For 2009, the ACS contains data for about 3 million households (Census Bureau 2013).²

The strength of the ACS is its breadth of coverage, which allows for more detailed and statistically significant analyses of population subsets such as minority groups. The ACS sample is substantially larger than those of other large household surveys, even such high-quality surveys as the Current Population Survey and the Survey of Income and Program Participation.³ Furthermore, because ACS response is mandatory, its response rate is higher than that for other surveys.⁴ Additionally, starting in 2006, the ACS sampling frame included both institutional and noninstitutional group quarters such as college dormitories, prisons, barracks, shelters, and nursing homes. Although less than 3 percent of the total population currently resides in group quarters, that population subset may be particularly relevant to the current analysis. One-half of group quarters residents live in institutional settings such as correctional facilities and nursing homes that provide formally supervised custody or care to inmates or patients. For example, the share of working-age people with disabilities residing in institutional group quarters is disproportionately African American (Stapleton, Honeycutt, and Schechter 2012). By including institutionalized disabled persons, the ACS captures more data for black OASDI beneficiaries and SSI recipients than the other household surveys. Additionally, African Americans are overrepresented among the population in correctional facilities, and incarceration is particularly relevant to certain subgroups in the African American population.⁵

Identifying new sources of data on OASDI and SSI receipt among minority groups is also important because the Social Security Administration (SSA) no longer provides detail by race for program data from administrative records. In SSA's Annual Statistical Supplement to the Social Security Bulletin, program data by race are not available for OASDI after 2009 or for SSI after 2002 because the quality of those data had become inconsistent.⁶ Although the ACS can help bridge this data gap, some limitations, summarized below, affect our analysis.

This study uses the PUMS of the 2009 ACS. All tables show descriptive statistics of the population, or subsets therein. OASDI benefit and SSI payment receipt are indicated in the ACS if the respondent reports any positive income from either or both of those programs in the past 12 months; however, PUMS data do not distinguish between OASDI retirement, survivor, and disability benefits. All benefit statistics are self-reported. All earnings, OASDI income, and SSI payments are in 2009 dollars.

There are three main limitations to the data. First, the accuracy of self-reported OASDI and SSI receipt has not been assessed.⁷ Some recipients may confuse SSI payments with OASDI benefits or fail to report payments, and in any event, PUMS data do not distinguish among OASDI benefit types. Second, our analysis of program participation among children is restricted to those aged 15–17 because the ACS, like the Current Population Survey, does not collect data on OASDI and SSI beneficiaries younger than age 15. Finally, because of limitations in survey questions used to determine disability, Burkhauser and others (2012) suggest that the 2009 ACS data fail to identify about one-third of the population aged 25–61 receiving either Social Security Disability Insurance (DI) benefits or SSI disability payments. As we discuss later, the “missing” respondents include those who report a work-activity limitation-based disability only.

In our analysis, “African American” refers to respondents who indicated they were not Hispanic on the ethnicity question and who selected “Black, African American, or Negro” on the racial question. Unless otherwise indicated, all comparisons between African Americans and the overall population, including OASDI beneficiaries and SSI recipients, are statistically significant at the 99 percent confidence level or better.

Demographic and Economic Characteristics in the ACS

Table 1 presents descriptive statistics for the African American and total US populations. It includes breakdowns by sex, age, marital status, educational attainment, disability status, income relative to poverty level, and annual earnings. We highlight some comparisons between African Americans and the total population, but do not discuss each of the breakdowns individually. Because the statistics for the total population include those for African Americans, the differences between the African American population and the remainder of the US population would exceed those reflected in Table 1.

Age

More than 22 percent of African Americans were younger than age 15 in 2009, compared with about 20 percent of the total population, and about 40 percent of African Americans were younger than age 25, compared with about 34 percent of the total population. In 2009, the median age for African Americans was 31.9 years, compared with 36.8 years for the total population, a 5-year gap (not shown). Significant differences also appear in older ages: 10.9 percent of African Americans were aged 62 (the youngest age at which an individual is eligible for Social Security retirement benefits) or older, compared with 15.8 percent of the total population.

Marital Status

African Americans tend to be younger, and they are less likely to be married—only 29.5 percent of African Americans were married, compared with 49.3 percent of the total population.⁸ The gap in marital rates suggests that African Americans are less likely to qualify for the Social Security spouse and survivor benefits that could otherwise enhance their economic well-being in old age (Meyer, Wolf, and Himes 2004; Tamborini, Iams, and Whitman 2009; Butrica and Smith 2012). Typically, an aged person is eligible for spousal or widow benefits if he or she is currently married, widowed, or divorced after a marriage that lasted 10 years or more.⁹ Spousal or widow benefits may support an individual whose earnings history is insufficient to qualify for his or her own benefits, or may supplement benefits based on one's own earnings record. Research has also documented the importance of marital status to adult well-being beyond its effect on Social Security (Waite and Gallagher 2000; Lillard and Panis 1996; Wilmoth and Koso 2002).¹⁰

Education

The educational attainment patterns of African Americans and the general population also differ: 18.4 percent of African Americans aged 25 or older did not have a high school diploma in 2009, compared with 14.7 percent of the total population. In addition, only 17.7 percent of African Americans had a bachelor's degree or higher, compared with 27.9 percent of the overall population. Educational attainment has important implications for lifetime earnings and labor market patterns. Higher education is related, for example, to greater lifetime earnings, lower unemployment rates, and higher income taxes (Bureau of Labor Statistics 2010; Levin and others 2006). Using Social Security administrative data linked with National Health Interview Survey data for disabled adults aged 25–62, Kirk (2012) finds that high-school dropouts comprise over one-quarter of DI beneficiaries and over one-half of SSI recipients.¹¹

Disability, Health, and Mortality

Disability has an obvious impact on participation in Social Security. Using the ACS definition of disability, African Americans were more likely to be disabled than were individuals in the total population, 14.4 percent versus 12.6 percent.¹² These findings are consistent with other research showing that African Americans experience a higher incidence of chronic diseases that can lead to disability. For example, although the leading causes of death for the US population—namely, heart disease (25 percent) and cancer (23 percent)—are similar regardless of race and ethnicity, African Americans have higher rates of diabetes, hypertension, and obesity.¹³

Differences in mortality reflect some of these health disparities. Although the gap in life expectancy between African Americans and whites has narrowed since 1990, it still persists. As of 2007, that gap was 6 years for men and 4 years for women (National Center for Health Statistics 2011).

It is worth emphasizing that the current ACS undercounts DI and SSI disability program participation. Burkhauser and others (2012) suggest that the 2009 ACS data miss about one-third of the population aged 25–61 receiving DI benefits or SSI disability payments. Since the Census Bureau introduced a new six-question sequence on disability for the 2009 ACS, the data have understated the size of the population with disabilities because none of those questions ask about work-activity limitations. The ACS also underrepresents DI/SSI beneficiaries in certain diagnostic groups such as intellectual disability.

Earnings

African Americans had lower earnings in 2009 than the overall population. Approximately 40 percent of African American workers aged 16 or older were low earners—earning $18,320 or less annually—compared with about 35 percent of the total population of workers.¹⁴ Table 2 shows that average or mean annual earnings were also lower for African Americans ($30,764) than for the overall population ($40,360). Annual mean earnings were consistently lower for African Americans than for the total population, and a higher percentage of African Americans was below the poverty level, regardless of age (Charts 1 and 2). As Social Security benefits are based on lifetime earnings in covered employment, lower earnings can lead to lower benefits. Note, however, that Social Security's benefit formula provides higher replacement rates (benefits as a percentage of preretirement earnings) for people with low lifetime earnings. It also helps people with partial careers—at least 10 years of work history or 40 quarters of coverage accrued—to be eligible for retirement benefits. Thus, although benefits received by African Americans tend to be lower than those of the overall population, they replace a higher percentage of their preretirement earnings.

Chart 1.
Annual mean earnings for African American and total US populations, by age, 2009 (in dollars)

SOURCE: 2009 ACS, PUMS.

NOTE: Total US population includes African Americans.

Chart 2.
Poverty rates for African American and total US populations, by age, 2009 (in percent)

SOURCE: 2009 ACS, PUMS.

NOTE: Total US population includes African Americans.

Unemployment

Unemployment is closely tied to educational attainment. Among adults in the labor force, a higher percentage of dropouts are unemployed than are high school completers (Department of Labor 2012). In 2010, African Americans aged 25 or older without a high school diploma had a 22.5 percent unemployment rate, almost three times higher than the 7.9 percent unemployment rate for those with a bachelor's degree or higher (Table 3 and Chart 3). Whites without a high school diploma had a 13.9 percent unemployment rate, compared with 4.3 percent for those with a bachelor's degree or higher.

Chart 3.
Unemployment rates for African American and white adults aged 25 or older, by educational attainment, 2010 (in percent)

SOURCE: Bureau of Labor Statistics, Current Population Survey.

NOTE: Racial categories comprise respondents who selected only one racial group, and may include individuals of Hispanic origin.

Incarceration

Incarceration is a factor often overlooked in research on unemployment inequality. Unlike the ACS, many surveys exclude institutionalized people (such as those in correctional facilities). That population is increasingly relevant, as incarceration rates have reached record levels (Thomas and Ryan 2008). Table 4 shows that for the 2005–2009 period, African Americans comprised the largest nonwhite share of persons in adult correctional facilities (41.1 percent), in contrast with their 12.6 percent share of the US population. African American men were incarcerated at a rate more than six times higher than white non-Hispanic men in 2009 (West 2010). Incarceration may offer a partial explanation of the relatively low earnings among some African Americans.^15,16 Relative to those who have never been incarcerated, previously incarcerated men have a 30–40 percent reduction in earnings, reduced job tenure, reduced hourly wages, and higher unemployment (Western and Pettit 2010). However, previously incarcerated African Americans have even lower earnings than other previously incarcerated men (Hutcherson 2009; Joseph 2010; Wakefield 2010; Western and Wildeman 2009).

African American and All OASDI Beneficiaries and SSI Recipients

This section presents selected characteristics of African American OASDI beneficiaries and SSI recipients compared with those of all OASDI beneficiaries and SSI recipients. The tables, based on the 2009 PUMS, show estimates for the full ACS beneficiary-data age range (15 or older), the working-age group (18–61), and the retirement-age group (62 or older). Data are tabulated by sex, age, marital status, education, disability status, and income relative to poverty level. As before, we focus our discussion on notable differences between the African American and total beneficiary populations.

Social Security

In 2009, African Americans comprised almost one-tenth (9.5 percent) of all OASDI beneficiaries aged 15 or older, over one-sixth (17.9 percent) of working-age OASDI beneficiaries, and almost one-twelfth (8.1 percent) of retirement-age OASDI beneficiaries (Table 5). The mean annual Social Security benefit in 2009 for retirement-age African American beneficiaries was about $10,430, compared with about $11,910 for all retirement-age beneficiaries (Table 6). Benefits for African Americans were also lower than those for the total population at the 25^th, 50^th (median), and 75^th percentiles. Similar benefit differences appeared in the full and working age ranges.

African American beneficiaries tend to be younger than beneficiaries overall. Almost 23 percent of African American beneficiaries were in the 25–61 age range, compared with 12.3 percent of all Social Security beneficiaries (Table 5). The proportion of African American beneficiaries younger than age 62 nearly doubled that of beneficiaries overall. This higher proportion of beneficiaries younger than age 62 may be partly explained by much higher proportions of disabled working-age African Americans and African American children (aged 15–17) receiving Social Security disability and survivor benefits. For example, almost one-fifth (19.5 percent) of minor children aged 15–17 receiving Social Security benefits were African American. In addition, about 17 percent of African American children aged 15–17 reported both having a disability and being a Social Security beneficiary; overall, less than 14 percent of that age group reported both (not shown).¹⁷

About one-third (35.4 percent) of African American beneficiaries aged 25 or older never completed high school, compared with less than one-fourth (22.5 percent) of beneficiaries overall. The proportion of African American beneficiaries that completed a bachelor's degree (10.5 percent) was about half that of the overall group (18.4 percent). However, the education gap may be shrinking for younger blacks. For beneficiaries aged 25–61, more than one-fourth (27.3 percent) of African Americans never completed high school, a proportion comparable with the 24.2 percent of beneficiaries overall. By contrast, for those aged 62 or older, more than one-third (37.9 percent) of African American beneficiaries never completed high school, a much wider gap from the 22.3 percent of beneficiaries overall.

At ages 62 or older, African American beneficiaries were more than twice as likely as all beneficiaries to have incomes below the federal poverty level (17.9 percent versus 8.3 percent). They were also almost twice as likely as all beneficiaries to have income below 125 percent of the poverty level and 1.8 times as likely to have income below 150 percent of the poverty level. This pattern was similar for those aged 15 or older. An even greater proportion of working-age African American beneficiaries had incomes below the poverty level (35.2 percent), although it did not double the proportion of the overall beneficiary population (25.0 percent).¹⁸

SSI

Individuals younger than age 65 are eligible for SSI if they are disabled or blind and meet the income and asset tests; when they reach age 65, they need to meet only the income and asset tests. To be consistent with the age ranges analyzed for OASDI beneficiaries, we use age 62 as the lower bound for our retirement-age group even though it differs from SSI's age-65 threshold.¹⁹

African Americans comprised over one-fifth (20.9 percent) of SSI recipients aged 15 or older, almost one-fourth (22.7 percent) of working-age SSI recipients, and roughly one-sixth (16.8 percent) of retirement-age SSI recipients (Table 7). Almost one-third (30.0 percent) of child SSI recipients aged 15–17 in 2009 were African American. In addition, about 94 percent of African American children aged 15–17 who reported being SSI recipients also reported being disabled, which was similar to the percentage for SSI recipients in that age group overall (not shown).²⁰ Average annual payments received by the total SSI population were about 7 percent higher than those received by African Americans for both the total 15-or-older and working-age recipient populations (Table 8). For those aged 62 or older, average annual SSI payments received by all recipients were about 18 percent higher than those received by African Americans.

Almost three-fourths of African American SSI recipients were younger than age 62 in 2009, compared with about two-thirds of all SSI recipients (Table 7). This younger African American SSI population may result from the higher disability rates reported among African Americans in general.

Slightly more than one in eight (13.5 percent) African American SSI recipients aged 15 or older were married, compared with nearly one in four (22.7 percent) among all SSI recipients. Half of African American SSI recipients never married (50.4 percent), compared with more than one-third (37.9 percent) of all SSI recipients. Among working-age SSI recipients, three-fifths (59.5 percent) of African Americans never married, compared with almost half (49.0 percent) of recipients overall. Among those aged 62 or older, about one-fifth (21.5 percent) of African American SSI recipients never married, substantially higher than the rate among SSI recipients overall (12.9 percent).

Among SSI recipients aged 15 or older, 78.7 percent of African Americans had no education beyond a high school diploma, compared with 74.6 percent of the general SSI population, a gap of 4.1 percentage points. Among those aged 18–61, the disparity is only 2.9 percentage points (76.3 percent versus 73.4 percent). Among those aged 62 or older, the education gap widens to 7.2 percentage points, 84.1 percent versus 76.9 percent.

African American SSI recipients had higher poverty rates than the overall SSI population (47.5 percent versus 39.2 percent), a gap of 8.3 percentage points, among those aged 15 or older. The working-age group had the greatest proportion in poverty (49.4 percent), compared with 43.0 percent of the general SSI population, a 6.4 percentage point gap. The gap for those aged 62 or older was the largest at 11.2 percentage points (43.3 percent for African Americans versus 32.1 percent overall). Among African American child SSI recipients aged 15–17, 41.5 percent were below the poverty threshold, versus 33.5 percent of SSI recipients in that age group overall (not shown).

Conclusion

This note uses the PUMS from the 2009 ACS to document the demographic, economic, and disability characteristics of the African American population. African Americans are, on average, younger, less likely to be married, and less educated. They have lower economic well-being, as seen in their lower earnings and in their higher poverty, unemployment, and incarceration rates. They suffer more health problems, as seen in higher disability and illness rates, which in turn lead to higher unemployment and lower earnings.

All of these demographic and socioeconomic characteristics affect the relationship between African Americans and OASDI and SSI. Lower earnings are most relevant to Social Security in that benefits are based on earnings. However, other characteristics can also affect benefit eligibility and income. For example, the higher never-married rate of African Americans reduces the share of their population eligible for the spouse and survivor benefits that could supplement the benefits their own work records provide.

Our results show that African Americans are less likely than the overall population to be OASDI beneficiaries and more likely to be SSI recipients. One in ten OASDI beneficiaries, and one in five SSI recipients, is African American. Higher rates of poverty, disability, and mortality among African Americans mean that those who are eligible are more likely to rely on Social Security survivor and disability benefits than are other Americans.

Future research could focus on the differences by race and ethnicity in the elderly population's reliance on Social Security income, in the use of auxiliary spouse and widow(er) benefits among retirees, and in the timing of claiming Social Security benefits. However, some of this work may not be possible with the ACS, given its limitations. The current analysis suggests that the ACS is a valuable source of information, but researchers need more robust, detailed data to better address OASDI and SSI receipt among traditionally vulnerable groups.