I am trying to use the CPS ASEC data to estimate the rate of non-recipiency of Old-Age, Survivors, and Disability Insurance (OASDI). I am using INCSS, and I am interested in estimating recipiency among those who are eligible in principle (62 year olds and above).
According to the Social Security Administration, last year the rate of non-recipiency for those 60 years and older was only 3.3 percent.
Using a different set of data, a three-year moving average of CPS ASEC 2015-2017, I estimated an OASDI non-recipiency rate among 70 year olds that was closer to 12.5 percent. I estimated non-recipiency by calculating the number of 70 year olds with $0 of INCSS income.
While the years of data are different, I would not expect that these percentages (3.3 percent versus 12.5 percent) would be so different. In fact, one would think that looking at 70 year olds and above would yield a lower non-recipiency rate provided that people often wait until as late as 67 to claim OASDI in order to obtain the maximum amount of benefit.
Is there any reason why this rate of non-recipiency is so high and so divergent from the SSA’s own estimates?
It appears that the 3.3% statistic refers to the total population aged 60 and over who will never receive social security benefits rather than those who do not currently receive benefits. For example, the pie chart on the right hand side notes that 1.3% of these 3.3% never beneficiaries die before receiving benefits. Data from the CPS produces estimates of the number of people who received social security benefits in the previous year.
This report from the Social Security Administration notes that about 52.7 million seniors aged 65 or older received social security in June 2023. Using the 2024 CPS ASEC (since income is reported for the previous calendar year), I get an estimate of 47.5 million recipients of social security aged 65+ (out of a total of 59 million people in this age group).
One factor that might be driving this discrepancy is that the CPS does not sample institutional group quarters (see page 58 of the CPS technical paper 77 regarding the sample frame). Noninstitutional group quarters are facilities for people who are not under formally authorized and supervised care and custody such as college housing, group homes for adults, workers’ living quarters, and convents. Institutional GQs include facilities such as prisons, skilled nursing facilities, and residential treatment centers for juveniles. Since weights in the CPS scale the sample to be representative of the US noninstitutionalized population, estimates using the CPS will miss this population.