How Is the Mortality Gap Affecting Social Security Progressivity?

Over the last half-century, average life expectancy at age 65 in the United States has increased by six years for men and four years for women. But these gains have been unequal across the population. While those with greater earnings and education have enjoyed substantially longer life spans, those with lower socioeconomic status (SES) have seen relatively small improvements in their late-life mortality. The unequal increase in life expectancy works against the progressive benefit design of Social Security. The program is set up to award more generous benefits – relative to pre-retirement earnings – to lower earners. But, due to the gap in life expectancy by SES, lower earners receive their benefits for relatively fewer years than their longer-lived counterparts. This brief reviews research by the Social Security Administration’s Retirement Research Consortium and others that investigates this widening gap and examines its consequences. The discussion proceeds as follows. The first section quantifies the growing gap in life expectancy by SES. The second section reviews evidence on why the gap has widened. The third section discusses how the gap affects lifetime Social Security benefits and the progressivity of the system. The final section concludes that, over time, the increasing mortality gap has significantly reduced Social Security’s progressivity.