College of LAS « Illinois

Economics / Gender and Women's Studies

The Evolving Relationship Between Women and Social Security

social security card

The current discussion over how to reform the Social Security system is a debate that touches the political, financial, and social nerves of this nation. The Social Security Administration estimates that under the status quo, its reserves will be depleted by 2041. But even though there is consensus that the 70-year-old system requires some policy changes so it can continue to provide retirement security, there are various means of attaining that goal.

Marianne A. Ferber, LAS professor emerita of economics and gender and women's studies, is among the many experts who believe that reforms of this nation's Social Security system would help protect future generations. Ferber cautions that any changes made to the system must consider the unique needs of women, their role in the workforce, and the effect of their decisions on the overall economy.

"Women are still treated very differently from men in the economy and in society," says Ferber. She and her co-authors, Patricia Simpson, an associate professor at Loyola University, and Vanessa Rouillon, a graduate student at U. of I., present their analysis in "The Aging Population and Social Security: Women as the Problem and as the Solution," a paper that will be published in Challenge later this year.  "What it amounts to is that a substantial proportion of women still make the decision, normally with their spouse, that the husband is going to be the primary wage earner and she is going to be the primary homemaker."

Under this arrangement, Ferber says, many women may still work full-time—but often they earn less, in part because employers do not view them as stable workers, and many do not remain in the workforce consistently. While many argue that the system will fail because the ratio of people of working age to retirees has declined considerably, Ferber argues that a more important ratio is those of employed to retirees, which has declined only marginally because of the increased participation of women in the labor force. She also expects this ratio to grow because in 2004, roughly 59 percent of women over 16 were in the labor force, versus 74 percent of men, according to the Bureau of Labor Statistics.

Ferber endorses the gradual elimination of Social Security benefits to the spouses of eligible workers—an idea that is highly controversial—which she contends would reduce the system's expenditures. Currently, a wife is entitled to half of the benefit her husband receives, if that is higher than her own accrued benefits.  A widowed spouse receives the full benefits.

Women who are full-time homemakers put themselves at financial risk, Ferber says. Divorce as well as disability or unemployment of her husband may force a woman with little experience into a low-paying, undesirable job with little opportunity. Ferber believes that eliminating spousal benefits would increase the incentive for women to enter the workforce and provide more impetus to pursue careers—thus putting themselves in a less vulnerable position.

"I don't think that would solve the whole problem," Ferber says. "You have to do a whole lot of things to do that. But I definitely think the influence would be in that direction."

Under the system's current rules, it is possible for a couple with one wage earner to receive more benefits than a two-earner couple with the same income because the former receives an additional 50 percent of the benefits for the non-employed spouse. Ferber supports the establishment of "earnings sharing," an idea that was first explored by the Social Security Administration in 1983. In this model, each spouse is credited half of the total eligible income earned during the marriage, regardless of how much each individual earned.

Ferber believes this tactic would offer security for spouses who interrupt their careers to raise children or care for other dependents, and would adjust benefits in case of divorce. Such a policy could also be extended to unmarried couples, she says.

"This would be universal and fair to everyone concerned," she says.

Fall/Winter 2005–06