Education, Earnings Inequality, and Future Social Security Benefits: A Microsimulation Analysis

by Patrick J. Purcell, Howard M. Iams, and Dave Shoffner
Social Security Bulletin, Vol. 75, No. 3, 2015
Table equivalent for Chart 1. Ratio of median earnings to the national AWI for college graduates and nongraduates born 1965–1979: Baseline and alternative projections, decennially 2020–2050
Educational attainment and simulation type 2020 2030 2040 2050
Graduate
Baseline 1.38 1.37 0.84 0.80
Alternative 1.43 1.48 0.95 0.93
Nongraduate
Baseline 0.69 0.64 0.45 0.54
Alternative 0.66 0.58 0.39 0.44
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.
Table equivalent for Chart 2. Ratio of median earnings to the national AWI for college graduates and nongraduates born 1965–1979, by sex: Baseline and alternative projections, decennially 2020–2050
Educational attainment and simulation type 2020 2030 2040 2050
  Men
Graduate
Baseline 1.74 1.72 0.96 0.88
Alternative 1.81 1.86 1.08 1.03
Nongraduate
Baseline 0.83 0.73 0.49 0.60
Alternative 0.79 0.66 0.42 0.49
  Women
Graduate
Baseline 1.07 1.09 0.75 0.74
Alternative 1.12 1.18 0.84 0.86
Nongraduate
Baseline 0.55 0.55 0.43 0.43
Alternative 0.53 0.49 0.37 0.35
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.
Table equivalent for Chart 3. Ratio of 75th- and 25th-percentile earnings to the national AWI for college graduates and nongraduates born 1965–1979: Baseline and alternative projections, decennially 2020–2050
Educational attainment and simulation type 2020 2030 2040 2050
  75th percentile
Graduate
Baseline 2.26 2.18 1.49 1.38
Alternative 2.35 2.35 1.68 1.59
Nongraduate
Baseline 1.14 1.05 0.76 1.05
Alternative 1.09 0.95 0.66 0.84
  25th percentile
Graduate
Baseline 0.69 0.72 0.42 0.33
Alternative 0.72 0.78 0.48 0.39
Nongraduate
Baseline 0.34 0.32 0.20 0.12
Alternative 0.32 0.29 0.17 0.09
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.
Table equivalent for Chart 4. Ratio of median Social Security benefit amounts to the national AWI for college graduates and nongraduates born 1965–1979: Baseline and alternative projections, decennially 2030–2060
Educational attainment and simulation type 2020 2030 2040 2050
Graduate
Baseline 0.27 0.38 0.39 0.38
Alternative 0.27 0.39 0.40 0.39
Nongraduate
Baseline 0.21 0.25 0.26 0.26
Alternative 0.21 0.24 0.25 0.25
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.
Table equivalent for Chart 5. Ratio of median Social Security benefit amounts to the national AWI for college graduates and nongraduates born 1965–1979, by sex: Baseline and alternative projections, decennially 2030–2060
Educational attainment and simulation type 2020 2030 2040 2050
  Men
Graduate
Baseline 0.31 0.44 0.44 0.42
Alternative 0.31 0.45 0.45 0.43
Nongraduate
Baseline 0.24 0.28 0.29 0.27
Alternative 0.24 0.27 0.27 0.26
  Women
Graduate
Baseline 0.24 0.33 0.35 0.35
Alternative 0.24 0.34 0.36 0.36
Nongraduate
Baseline 0.19 0.22 0.23 0.24
Alternative 0.18 0.22 0.23 0.23
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.
Table equivalent for Chart 6. Ratio of 75th- and 25th-percentile Social Security benefit amounts to the national AWI for college graduates and nongraduates born 1965–1979: Baseline and alternative projections, decennially 2030–2060
Educational attainment and simulation type 2020 2030 2040 2050
  75th percentile
Graduate
Baseline 0.39 0.49 0.48 0.46
Alternative 0.38 0.50 0.49 0.47
Nongraduate
Baseline 0.29 0.34 0.35 0.34
Alternative 0.28 0.33 0.33 0.32
  25th percentile
Graduate
Baseline 0.18 0.27 0.29 0.28
Alternative 0.18 0.27 0.30 0.29
Nongraduate
Baseline 0.15 0.18 0.19 0.19
Alternative 0.15 0.18 0.19 0.18
SOURCE: Authors' calculations using MINT7.
NOTES: “College” refers to 4-year institutions.
The baseline simulation assumes that the AWI grows at 1.2 percent per year for all workers. The alternative simulation assumes annual AWI growth rates of 1.6 percent for college graduates and 0.7 percent for nongraduates.
Projections are restricted to workers with covered earnings.