UM20-04: Forecasting survival by socioeconomic status and implications for Social Security benefits, Year 2
Individuals with higher socioeconomic status tend to live longer than those with lower SES. The gap in survival rates has widened in recent decades, potentially affecting aggregate Social Security payouts. In prior research we forecast mortality stratified by SES using a novel method based on subjective survival probabilities and on a rich set of subjective and objective health measures. Our model predicted that mortality inequality will continue to increase in the future. In this new research we investigate the implications of these trends for expected future Social Security payments using a microsimulation framework. We use the estimated trends in differential survival as well as projections about labor force status, earnings, and marital status to forecast annual and lifetime Social Security payments in total and for subpopulations defined by their SES.