Poverty among elderly women: assessing SSI options to strengthen Social Security reform

We explore the potential of the Supplemental Security Income (SSI) program to reduce poverty among elderly women. We develop a methodological framework that compares how well various reform proposals are targeted to reducing poverty among elderly women.

Using a microsimulation model and survey data matched to SSI administrative records, we model the effects of eight alternative policies on current and potential SSI recipients. We develop an evaluation methodology that systematically compares poverty outcomes, using multiple measures of effectiveness, at given levels of program expansion.

All but two of the SSI reforms are clearly more target efficient at various degrees of simulated program expansion than popular proposals to reform Social Security. For a given cost increase, modifying the SSI asset test is the most effective option for reducing severe poverty among elderly women, but several reforms of the SSI income test are also highly effective.

The SSI program is target efficient in providing a broad safety net to economically vulnerable elderly women. The relationship between SSI and Social Security and the relationship between the SSI asset and income tests have to be reevaluated to make the program more effective and appropriate to changing household structure and work patterns among the elderly population.