The Center for Retirement Research at Boston College has released an issue brief entitled, "Modernizing Social Security: Caregiver Credits." The brief opens with the following statement of the challenge presented by recent demographic changes:Women still tend to work fewer years and earn less than men, which leads to less income in retirement. One reason is that women are often still the main family caregiver. Traditionally, Social Security has recognized this role by providing spousal and widow benefits for married women. Today, however, many women are not eligible for these benefits because they never married or they divorced prior to the 10-year threshold needed to qualify. Even those who are married are less likely to receive a spousal benefit, as their worker benefit is larger. Thus, many mothers receive little to no support to offset lost earnings due to childrearing.
Of course, the population for whom Social Security was designed looks much different than the population for whom Social Security must provide benefits. Social Security was designed in the 1930s when, typically, the husband was the sole breadwinner and the wife a homemaker. The program included spousal and widow benefits designed for this standard one-earner household. Although these family benefits are not gender based, they typically worked to benefit women because women generally work fewer years and earn less than men. The ability of women to receive family benefits, however. has declined sharply in recent decades as their employment patterns and the nature of the family unit have changed dramatically.
On the employment front, the labor force activity of married women has increased significantly, which means that women increasingly receive benefits based on their own earnings record, and are much less likely to receive spousal or widow benefits. Despite their increased workforce activity, though, research suggests that women continue to be at a disadvantage in the labor market compared to men. Research suggests that part of the reason is caregiving duties, which can reduce work hours and affect access to better-paying jobs. For example, women ages 25-44 – those most likely to have young children – work part time more often than men. Even when working full time, women earn only about 80 percent as much as men.
Contributing to the challenge of providing a fair benefit for women is that fewer women are eligible for Social Security family benefits due to patterns of marriage and divorce. The increasing divorce rate has resulted in about 25 percent of first marriages ending within 10 years, the eligibility threshold needed for access to family benefits. These short-lived marriages, which comprise a greater number of total marriages, unfortunately, are excluded from access to family benefits under Social Security, despite the continuing financial burdens the marriages place upon the individuals involved.
Childbearing among unmarried women has also increased sharply – from 18 percent of all births in 1980 to 40 percent today. These trends have sharply increased the percentage of households headed by single mothers, leaving a wide swath of women with no access to family benefits. Compared with married mothers, single mothers face even more labor market constraints from their childcare responsibilities, further impeding their job prospects and reducing their ability to earn an adequate Social Security benefit.
Overall, the changes in labor market and marital patterns mean that large numbers of women are going to move through retirement with more disadvantages than their earlier counterparts. Not surprisingly, among those ages 65 and over, poverty rates for unmarried women exceed those of unmarried men, and unmarried women account for one-third of all households ages 65-69 and two-thirds of households ages 85 and over. Childcare responsibilities are a major contributor to low income in retirement. One study found that women ages 65-74 who spent at least 10 years as a single mother were 55 percent more likely to be poor than continuously married mothers of similar education and ethnicity.
Because of the poor outlook for retirement income among single women and a growing sense that the economic value of caregiving should be recognized, many policy experts have advocated caregiver credits. The 10 page brief looks at how the topic is handled in other countries and discusses two avenues for resolution in the U.S.: (1) "[i]ncrease the number of work years that are excluded from benefit calculations ... [and] (2) [p]rovide earnings credits to parents with a child under age six for up to five years." The brief argues for earnings credits for child rearing.
The brief concludes in part:
"It is easy to understand the appeal of crediting Social Security records to reflect lost earnings due to caring for a child. In the past, this activity was usually compensated for by the spousal benefit, but changes in women’s work and marriage patterns have left fewer eligible for it. A credit is also more appealing than a spousal benefit if the goal is to compensate for the costs of child rearing, independent of marital status."
Regardless to which cause or causes you attribute these changes, there is little question that the disparity, at least in outcomes among single women, is real. Moreover, our society is evolving to value more "caregiving," whether or not familial, and regardless of the age or needs of the person requiring care. Nothing could better underscore the real value of caregiving, especially for children, than the government recognizing a financial value for the effort in order to provide a more effective safety net for seniors.
Particularly as the government struggles to find effective solutions for care and support, and individuals, families, and communities design and construct their own, often non-governmental solutions, these efforts should find encouragement and support. In other words, the decision to value caregiving will not only impact retirement income for a vulnerable group of retirees, but will suggest promise in addressing the caregiving needs , demands, and realities, of both the elderly, and the someday-to-be-elderly family caregivers.
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