The Sensitivity of Proposed Social Security Benefit Formula Changes to Lifetime Earnings Definitions

by Hilary Waldron
Social Security Bulletin, Vol. 72 No. 2, 2012
Table equivalent for Chart 1. Average number of hours worked "last week" for persons aged 25–54, by sex, selected years 1968–2007
Year Average hours worked last week
Men Women
1968 40.5 15.8
1970 39.7 16.2
1972 38.9 16.6
1974 38.6 17.3
1976 36.9 17.7
1978 37.9 19.6
1980 37.2 20.9
1982 35.4 21.0
1984 36.2 22.1
1986 36.5 23.6
1988 37.5 24.8
1990 37.5 25.3
1992 40.1 25.9
1994 36.2 25.4
1996 36.7 26.1
1998 37.5 26.6
2000 37.9 27.0
2002 36.0 26.4
2004 35.5 26.1
2006 35.8 26.0
2007 36.2 26.2
SOURCES: Author's calculations based on selected years of the Census Bureau's March Supplement to the Current Population Survey (CPS), using Unicon Research Corporation's CPS utilities (2009), http://www.unicon.com.
NOTES: Average hours include zero hours of work. Last week refers to the week prior to the week in which the CPS respondent participated in the March Supplement to the CPS.
Table equivalent for Chart 2. Share of type of male and female workers aged 25–64, selected years 1975–2006
Year All year, full time Less than all year, full time Part time Nonworker
  Men
1975 72.8 18.2 3.6 5.5
1979 75.5 16.2 3.5 4.8
1984 72.6 15.8 4.9 6.7
1989 74.9 14.3 4.8 6.0
1994 73.2 13.0 5.6 8.2
1999 77.8 10.6 4.0 7.6
2004 74.4 10.6 5.0 10.0
2006 75.9 10.2 4.5 9.5
  Women
1975 29.7 14.9 17.4 38.1
1979 35.4 16.0 18.8 29.8
1984 41.1 13.3 19.2 26.5
1989 45.9 13.8 18.1 22.3
1994 47.7 11.7 19.1 21.5
1999 52.9 11.1 16.7 19.4
2004 51.1 9.6 16.3 23.1
2006 52.5 9.1 15.7 22.8
SOURCES: Author's calculations based on selected years of the Census Bureau's March Supplement to the Current Population Survey (CPS), using Unicon Research Corporation's CPS utilities (2009), http://www.unicon.com.
NOTES: The CPS "weeks worked last year recode" variable used here is derived from self-reports on the number of weeks worked "last year" and the number of hours usually worked last year. Last year refers to the year prior to the year in which the CPS respondent participated in the March Supplement to the CPS.
Table equivalent for Chart 3. Total paid and unpaid hours worked, by sex and age group, 2003–2007
Age group and sex Total paid and unpaid hours worked Hours spent on unpaid household work Hours spent on paid work
  Men
25–34 57.2 15.8 41.4
35–44 60.0 18.3 41.7
45–54 57.6 17.0 40.6
  Women
25–34 58.0 31.7 26.3
35–44 60.4 33.1 27.3
45–54 55.8 26.7 29.1
SOURCE: Krantz-Kent (2009, Table 1).
Table equivalent for Chart 4. AIME distribution, by sex (2007), with current-law and proposed bend points
Percentile Unisex Male Female
1 254 348 224
2 314 438 267
3 368 513 303
4 415 574 340
5 457 637 370
6 500 702 406
7 536 771 431
8 575 852 458
9 614 931 486
10 652 999 514
11 687 1,063 539
12 726 1,136 571
13 769 1,229 597
14 814 1,304 625
15 857 1,380 650
16 897 1,465 675
17 940 1,559 701
18 984 1,642 726
19 1,020 1,716 760
20 1,062.5 1,803 787
21 1,106 1,875 818
22 1,150 1,955 845
23 1,198 2,039 875
24 1,248 2,110 901
25 1,294 2,175 932
26 1,348 2,255 960
27 1,394 2,323 992
28 1,440 2,403 1,013
29 1,495 2,485 1,047
30 1,541.5 2,561 1,073
31 1,591 2,637 1,109
32 1,643 2,710 1,136.5
33 1,697 2,793 1,171
34 1,746 2,865 1,208
35 1,795 2,945 1,240
36 1,852 3,015 1,271.5
37 1,902 3,084 1,302
38 1,947 3,151 1,342
39 2,005 3,210 1,381
40 2,063 3,279.5 1,411.5
41 2,117 3,337 1,443
42 2,170 3,400 1,484
43 2,223 3,459 1,511
44 2,277 3,513 1,543.5
45 2,329 3,577 1,580
46 2,394 3,629 1,618
47 2,451 3,688 1,650
48 2,519 3,742 1,691
49 2,575 3,813 1,730
50 2,635 3,878 1,763
51 2,699 3,942 1,800
52 2,765 3,992 1,843
53 2,830 4,048 1,883
54 2,897 4,104 1,916
55 2,970 4,165 1,949
56 3,037 4,234 1,986
57 3,105 4,295 2,032
58 3,170 4,359 2,079
59 3,235 4,415 2,125
60 3,297.5 4,472 2,168
61 3,368 4,536 2,213
62 3,439 4,602 2,252
63 3,506 4,657 2,290
64 3,574 4,716 2,332.5
65 3,636 4,771 2,387
66 3,704 4,834 2,435
67 3,775 4,898 2,485
68 3,853 4,952 2,541.5
69 3,931 5,004 2,582
70 3,999.5 5,065 2,630
71 4,077 5,136 2,686
72 4,158 5,202 2,739.5
73 4,245 5,269 2,795
74 4,331 5,343 2,855
75 4,409 5,409 2,927
76 4,491 5,477 2,983.5
77 4,583 5,555 3,054
78 4,668 5,627 3,120
79 4,760 5,682 3,190
80 4,851 5,756.5 3,253
81 4,945 5,813 3,326
82 5,036 5,883 3,408
83 5,140 5,949 3,495
84 5,235 6,029 3,570
85 5,345 6,091 3,645
86 5,451 6,155 3,725
87 5,568 6,222 3,829
88 5,674 6,277 3,919
89 5,781 6,353 4,014
90 5,890 6,431 4,155
91 6,016 6,510 4,275
92 6,119 6,582 4,406.5
93 6,237 6,654 4,571
94 6,350 6,732 4,756
95 6,484 6,785 5,000
96 6,625 6,852 5,220.5
97 6,745 6,904 5,459
98 6,861 6,944 5,780
99 6,949 6,961 6,232
SOURCES: Author's calculations using Social Security administrative data files (1 percent 2008 active CWHS, 1 percent 2010 MBR, and 1 percent 2009 Numident).
NOTE: Additional in-chart data points are shown for the current-law bend points (unisex) at $680 and $4,100 and for the proposed bend points (unisex) at $680, $2,635, and $4,100.
Table equivalent for Chart 5. Median earnings at age 50 for the 1945 birth cohort, by lifetime earnings decile and sex
Earnings decile Excluding zero earnings Including zero earnings
Men Women Men Women
1 4,564 1,542 0 0
2 22,591 9,818 11,096 1,788
3 34,093 16,890 27,409 11,114
4 46,259 22,817 39,499 18,521
5 57,560 29,705 52,774 25,613
6 68,550 36,667 64,069 32,644
7 80,536 44,164 77,009 40,709
8 96,668 53,659 93,065 50,718
9 123,768 67,666 119,066 64,877
10 217,995 97,132 211,521 94,140
SOURCES: Author's calculations using Social Security administrative data files (1 percent 2008 active CWHS, 1 percent 2010 MBR, and 1 percent 2009 Numident).
NOTES: Sample consists of birth cohort 1945, newly eligible for retired-worker benefits in 2007. Sample excludes DI beneficiaries; survival to age 63 required.
Table equivalent for Chart 6. Percentage of men at the current-law and proposed PIA bend points, by male earnings deciles
Earnings decile AIME ≤ current-law bend point 1 AIME > bend point 1 and AIME ≤ bend point 2A (proposed) AIME > bend point 2A (proposed) and AIME ≤ current-law bend point 2 AIME > current-law bend point 2
1 29.8 62.8 7.0 0.4
2 11.1 72.4 15.5 1.0
3 1.0 57.7 37.6 3.8
4 0.8 22.5 66.0 10.7
5 1.5 9.2 61.1 28.2
6 3.0 7.4 27.0 62.5
7 4.0 8.3 7.2 80.5
8 3.4 5.1 3.2 88.3
9 2.5 5.2 2.4 89.9
10 0.1 2.1 2.3 95.5
SOURCES: Author's calculations using Social Security administrative data files (1 percent 2008 active CWHS, 1 percent 2010 MBR, and 1 percent 2009 Numident).
NOTES: Sample consists of birth cohort 1945, newly eligible for retired-worker benefits in 2007. Sample excludes DI beneficiaries; survival to age 63 required. Male earnings deciles show relative average earnings from ages 45 through 55, with zeroes included in the average.
Table equivalent for Chart 7. Percentage of men at current-law and proposed PIA bend points, by male earnings deciles: Restricted analytical sample
Earnings decile AIME ≤ current-law bend point 1 AIME > bend point 1 and AIME ≤ bend point 2A (proposed) AIME > bend point 2A (proposed) and AIME ≤ current-law bend point 2 AIME > current-law bend point 2
Zero earnings from ages 45–55 37.9 57.3 4.8 0.0
1 17.7 73.5 8.8 0.0
2 1.7 69.2 27.1 2.1
3 0.1 30.8 63.6 5.5
4 0.1 9.9 72.4 17.6
5 0.0 2.4 51.5 46.1
6 0.0 0.8 19.5 79.6
7 0.0 0.4 4.6 95.0
8 0.1 0.4 1.9 97.6
9 0.1 0.6 1.8 97.5
10 0.0 0.1 1.2 98.7
SOURCES: Author's calculations using Social Security administrative data files (1 percent 2008 active CWHS, 1 percent 2010 MBR, and 1 percent 2009 Numident).
NOTES: Sample consists of birth cohort 1945, newly eligible for retired-worker benefits in 2007. Sample excludes DI beneficiaries, the foreign born, and workers with mostly non–Social Security taxable earnings; survival to age 63 required. Male earnings deciles show relative average earnings from ages 45 through 55, with zeroes included in the average.
Table equivalent for Chart A-1. Percentage of population at age 30 with various years of school completed, by sex, selected years 1968–2008
Year Men Women
<12 12–15 16+ <12 12–15 16+
1968 30 50.6 19.5 30.9 57.4 11.7
1970 25.5 54.7 19.8 25.8 62.2 12.1
1972 22.1 54.5 23.3 25.8 60.8 13.4
1974 18.2 58.5 23.3 18.9 64.6 16.5
1976 17.7 55.9 26.4 20 60.8 19.3
1978 13.7 56 30.3 17.8 63 19.2
1980 12.8 55.9 31.4 15.4 64.5 20.1
1982 12.6 60.4 27 12.5 64.7 22.8
1984 13.4 60 26.5 13.8 63.9 22.3
1986 13 61.1 25.9 13.2 64.9 21.9
1988 13.2 62.2 24.6 13 63.9 23.1
1990 17.6 59.5 22.9 13.4 64 22.5
1992 14.6 61.4 23.9 14.5 62.7 22.9
1994 15.4 60.4 24.2 12.1 65.2 22.7
1996 15.4 59.6 25 12.1 61.2 26.7
1998 10.7 59.9 29.4 11.2 58.8 30
2000 13.9 56.4 29.7 11.7 59.9 28.5
2002 15.7 57 27.4 11.3 56.8 32
2004 14.3 58 27.7 10.6 56.6 32.8
2006 14.1 59.6 26.3 11 55.8 33.2
2008 13.7 58.3 28 10 54.3 35.7
SOURCES: Author's calculations based on selected years of the Census Bureau's March Supplement to the Current Population Survey (CPS), using Unicon Research Corporation's CPS utilities (2009), http://www.unicon.com.
Table equivalent for Chart A-2. Ratio of the Social Security taxable maximum to the national average wage index, 1951–2010
Year Ratio
1951 1.3
1952 1.2
1953 1.1
1954 1.1
1955 1.3
1956 1.2
1957 1.2
1958 1.1
1959 1.2
1960 1.2
1961 1.2
1962 1.1
1963 1.1
1964 1.0
1965 1.0
1966 1.3
1967 1.3
1968 1.4
1969 1.3
1970 1.3
1971 1.2
1972 1.3
1973 1.4
1974 1.6
1975 1.6
1976 1.7
1977 1.7
1978 1.7
1979 2.0
1980 2.1
1981 2.2
1982 2.2
1983 2.3
1984 2.3
1985 2.4
1986 2.4
1987 2.4
1988 2.3
1989 2.4
1990 2.4
1991 2.4
1992 2.4
1993 2.5
1994 2.6
1995 2.5
1996 2.4
1997 2.4
1998 2.4
1999 2.4
2000 2.4
2001 2.4
2002 2.6
2003 2.6
2004 2.5
2005 2.4
2006 2.4
2007 2.4
2008 2.5
2009 2.6
2010 2.6
SOURCE: Author's calculations using SSA's Office of the Chief Actuary historical series, http://www.socialsecurity.gov/OACT/COLA/wageindexed.html.