Long-Run Intergenerational Effects of Social Security

Daniel Fetter (), Lee Lockwood () and Paul Mohnen ()
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Daniel Fetter: https://economics.dartmouth.edu/people/daniel-k-fetter
Lee Lockwood: https://economics.virginia.edu/people/lee-lockwood
Paul Mohnen: https://www.atlantafed.org/who-we-are/people/research/economists/paul-mohnen

No 2026-10, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: Both historically and today, support of aging parents has largely taken the form of in-kind transfers that require physical proximity, such as housing and caregiving. If Social Security substitutes for such support, it can relax constraints on where recipients' children live and work. We investigate the long-run intergenerational effects of the early Social Security program, exploiting within-occupation, cross-industry differences in coverage, and a new dataset linking parents to their children's later-life outcomes. We find that sons whose parents had greater predicted coverage moved farther from their childhood homes, earned more, and lived in better neighborhoods late in life. We find no such effects for daughters, who tended to provide forms of support less easily replaced by Social Security. The gains considerably exceeded the associated Social Security benefits for the average family, with migration to better-matched labor markets a likely key driver. We propose that the early program enabled families to realize gains from migration that were back-loaded, uncertain, and difficult to contract on.

Keywords: Social Security; social insurance; old-age support; intergenerational transfers; coresidence; geographic mobility; internal migration; intergenerational mobility; linked census data; New Deal; public pensions (search for similar items in EconPapers)
JEL-codes: D15 H55 J14 J61 N32 R23 (search for similar items in EconPapers)
Pages: 117
Date: 2026-07-16
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DOI: 10.29338/wp2026-10

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