The potential of the SSI program to reduce poverty among the elderly

Area of Science:

• Social Policy
• Economics
• Poverty Reduction

Background:

• The Supplemental Security Income (SSI) program is a key federal benefit for low-income aged, blind, and disabled individuals.
• Policy decisions regarding SSI often involve trade-offs between increasing benefit levels and expanding program eligibility.
• Understanding the comparative effectiveness of these strategies is crucial for optimizing poverty reduction efforts.

Purpose of the Study:

• To compare the poverty reduction effectiveness of increasing Supplemental Security Income (SSI) benefit levels versus expanding SSI eligibility.
• To analyze these strategies from a policymaker's perspective, considering fixed program costs.
• To identify the most efficient method for reducing poverty among the elderly population through SSI.

Main Methods:

• Utilized a microsimulation model incorporating eligibility and benefits calculators.
• Included a participation model to estimate program uptake.
• Employed an optimization algorithm to compare policy scenarios.
• Data sourced from the Survey of Income and Program Participation and SSI administrative records.

Main Results:

• Increasing SSI program eligibility by relaxing means-test restrictions demonstrated greater poverty reduction potential compared to raising benefit levels.
• This finding holds true when comparing strategies at equivalent program cost levels.
• The analysis provides quantitative insights into the efficiency of different SSI policy levers.

Conclusions:

• Relaxing eligibility criteria for the SSI program is a more effective strategy for reducing elderly poverty than increasing benefit payments.
• Policymakers should consider expanding access to SSI for eligible individuals as a primary tool for poverty alleviation.
• The study underscores the importance of program design in maximizing the impact of social welfare programs.