1. Comments by Paul S. Davies* Social Security Administration The Great Recession, the Social Safety Net, and Economic Security for Older Americans Presented at the 17 th Annual RRC Annual Meeting August 7, 2015 * The opinions expressed are my own and do not represent the opinions or policy of the Social Security Administration or any agency of the Federal government.

2. Highly Commendable Paper A traditional tour de force by Johnson and Smith  6 national surveys  21 tables  3 figures  6 appendix tables Thorough and comprehensive Virtually no stone left unturned 2

3. Some Details Unemployment, labor force participation, and employment  CPS, with cross-checks against ACS and SIPP Income  CPS and SIPP, with cross-checks against ACS and HRS Wealth  SCF, with cross-checks against SIPP and PSID Social Security claiming  SIPP-SSA linked data Impacts of unemployment  SIPP-SSA linked data 3

4. Key Findings for Older Workers (62+) Unemployment lower among older workers, but longer spells and lower earnings in new job  Median spell > 24 months for those aged 62+  Median earnings loss in new job = 32.6%, largely through reduced hours Labor force participation rates increased among older age groups Income losses lower for older unemployed workers  Surge in Social Security claiming among older workers Large increases in receipt of unemployment insurance and public assistance Lower but substantial decline in wealth for older ages  Mostly driven by decline in home value  Value of retirement accounts did not change much for 62+ 4

5. For Further Consideration Cohort-based analysis Labor force exit and entry Defined benefit pensions Effects of changes in Social Security claiming 5

6. Cohort-Based Analysis Much of the analysis looks at changes over time for given age groups  Estimates for workers age 62-64 in 2007 compared with workers age 62- 64 in 2014, for example  Unemployment rate, labor force participation rate, employment- population ratio, family income, poverty rate, household wealth Would be interesting to use HRS to look at these measures across birth cohorts as they age through the Great Recession  Analysis of SIPP-SSA data does this to some extent, with a focus on long- term unemployed workers  Perhaps could use HRS to sharpen the focus on retired individuals and individuals approaching retirement 6

7. Labor Force Exit and Entry What about labor force exits among older workers?  Much of the analysis focuses on unemployment and impacts of long-term unemployment How about labor market entry?  Some findings point to higher labor force participation rates among older age groups With longitudinal data from SIPP or HRS, it may be possible to:  Track job losses that lead to labor market exit and examine income and wealth changes for this potentially vulnerable group  Identify labor force entrants, perhaps spouses who exit retirement or enter the labor market to bolster family income 7

8. Defined Benefit Pensions Older age groups more likely to have defined benefit pensions; younger groups more likely to be contributing to defined contribution retirement accounts DB pensions protected older groups from more severe income and wealth losses during Great Recession  Social Security benefits play an important role as well, as the paper demonstrates DC retirement accounts, however, have greater potential for recovery and growth among younger groups Dushi, Iams, and Tamborini (2013); Gustman, Steinmeier, and Tabatabai (2013, 2014) 8

9. Changes in Social Security Claiming Good news…  Social Security provides a steady, stable stream of income to partially offset lost wages of older insured workers  Nearly four-fifths of long-term unemployed workers received Social Security benefits after the Great Recession  Some workers may need to work longer and delay claiming, thus increasing their Social Security benefit (Potentially) bad news…  Some older workers displaced by the Great Recession may have claimed Social Security earlier than they otherwise would have, leading to permanently lower monthly Social Security benefits  Workers in their 50s and facing long-term unemployment may claim Social Security upon reaching age 62, perhaps earlier than planned, and suffer permanently lower monthly Social Security benefits The model in this paper finds a rise in claiming probability in recession periods. Perhaps the analysis could be expanded to look at distributional effects on retirement income security for early claimers and delayed claimers. 9

10. Final Thoughts Very thorough analysis Exploits comparative strengths of available data sources  CPS for unemployment and poverty, SCF for wealth, SIPP for income and longitudinal analysis Can tinker around the edges, but should be required reading for anyone studying the economic effects of the Great Recession 10