The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age (CRS Report for Congress)
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Release Date |
Revised July 6, 2021 |
Report Number |
R44846 |
Report Type |
Report |
Authors |
Katelin P. Isaacs, Sharmila Choudhury, Zhe Li, Isaac A. Nicchitta |
Source Agency |
Congressional Research Service |
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Summary:
Life expectancy is a population-level measure that refers to the average number of years an
individual will live. Although life expectancy has generally been increasing over time in the
United States, researchers have long documented that it is lower for individuals with lower
socioeconomic status (SES) compared with individuals with higher SES. Recent studies provide
evidence that this gap has widened in recent decades. For example, a 2015 study by the National
Academy of Sciences (NAS) found that for men born in 1930, individuals in the highest income
quintile (top 20%) could expect to live 5.1 years longer at age 50 than men in the lowest income
quintile. This gap has increased significantly over time. Among men born in 1960, those in the
top income quintile could expect to live 12.7 years longer than men in the bottom income
quintile. This NAS study finds similar patterns for women: the life expectancy gap between the
bottom and top income quintiles of women expanded from 3.9 years for the 1930 birth cohort to
13.6 years for the 1960 birth cohort.
Gains in life expectancy are generally heralded as good news by lawmakers and others, signifying
improved well-being in the population. Yet widening differentials in life expectancy are more
troubling. Congress may be interested in recent research on this topic for many reasons, including
the implications for Social Security benefits as well as Social Security reform proposals.
Social Security provides monthly benefits to retired and disabled workers and their dependents,
and to dependents of deceased workers. A key goal of the Social Security program is
redistribution of income from the high earner to the low earner by way of a progressive benefit
formula. Widening gaps in life spans by SES pose a challenge to meeting this goal. When Social
Security benefits are measured on a lifetime basis, low earners, who show little to no gains in life
expectancy over time, are projected to receive increasingly lower benefits than those with high
earnings. For instance, in the 2015 NAS study, men in the lowest earnings quintile saw little or no
improvement in the value of their lifetime Social Security retirement benefits between the 1930
and 1960 birth cohorts (roughly $125,000 in 2009 dollars in lifetime benefits for both birth
cohorts). Due to gains in life expectancy for higher earners, however, men in the highest earnings
quintile born in 1930 had lifetime Social Security benefits of $229,000, and men in the highest
earnings quintile born in 1960 had estimated lifetime benefits of $295,000. Thus, according to
this 2015 NAS analysis, differential gains in life expectancy increased the disparity in the lifetime
value of Social Security retirement benefits between the top and bottom earnings quintiles by
about $70,000 (in 2009 dollars) for the later birth cohort.
In response to rising life expectancy, some commonly discussed Social Security reform proposals
involve increasing the retirement age. Yet these proposals would affect low earners
disproportionately (i.e., reductions in their lifetime Social Security benefits would be
considerably larger than for high earners). Congress may be interested in policy proposals that
mitigate the uneven effects of increasing the retirement age and protect the interests of lowerearning,
shorter-lived workers.
This report provides a brief overview of the concept of life expectancy, how it is measured, and
how it has changed over time in the United States. While life expectancy may be studied in a
variety of contexts, this report focuses on the link between life expectancy and SES, as measured
by lifetime income. In particular, this report synthesizes recent research on (1) the life expectancy
gap by income and (2) the relationship between this gap and Social Security benefits. Finally, this
report discusses the implications of this research for one type of Social Security reform proposal:
increasing the Social Security retirement age.