Statistical Security for Social Security

The financial health of the U.S. Social Security program, which includes benefits for elderly and disabled persons, is an ongoing hot political, social, economic and policy issue. The Social Security Administration (SSA) evaluates various social, biological, environmental and medical factors as they influence mortality trends to determine the solvency of the largest U.S. government program. As in any forecasting, the more information that can be factored in, the more accurate those forecasts can be.

These authors propose an alternative method of forecasting mortality than what the SSA currently uses. They suggest formally incorporating known risk factors of smoking and obesity that have biological effects and are linked to higher disability rates, lower earnings during working years and higher mortality risk after retirement. Taking into account declines in smoking rates, increases in the prevalence of obesity and other demographic patterns, these researchers expect ages at death to be older than the SSA’s “intermediate-cost mortality scenario” and similar to the “high-cost mortality scenario.”

The authors conclude that Social Security “may be in a considerably more precarious position than officially thought.” They call for “greater study on the complex interrelationship of demographic, economic, and policy processes” by the scholarly research community.