Long-Run Intergenerational Effects of Social Security
July 16, 2026
Summary
How did the early Social Security program affect recipients' children? The authors find that by substituting for location-dependent family support, it enabled sons to move to better-matched labor markets, earn more, and live in better neighborhoods late in life.
View PaperWorking Paper 2026-10
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.
JEL classification: H55, N32, J61, R23, J14, D15
Key words: Social Security, social insurance, old-age support, intergenerational transfers, coresidence, geographic mobility, internal migration, intergenerational mobility, linked census data, New Deal, public pensions
https://doi.org/10.29338/wp2026-10
Daniel K. Fetter is with Dartmouth College and NBER. Lee M. Lockwood is with the University of Virginia and NBER. Paul Mohnen is with the Federal Reserve Bank of Atlanta. For helpful comments and discussions, the authors thank Ran Abramitzky, Amy Finkelstein, Sasha Indarte, Olivia Mitchell, Matt Notowidigdo, Jim Poterba, Shanthi Ramnath, Arthur Seibold, Kent Smetters, Jessica Van Parys, Heidi Williams, as well as participants at the AEA, Atlanta Fed, Berkeley, Boston College Center for Retirement Research, Boston Fed, Chicago Fed, Clemson, Dartmouth, Emory, Harvard, GMU, Hitotsubashi, IPUMS, KU Leuven, Lehigh, LMU-Munich, Michigan RDRC, Minneapolis Fed, NBER (Aging, DAE, ESS, Economics of Mobility, TAPES), Philadelphia Fed, Princeton, UC Davis, UCLA, UIUC, UNL, Rutgers, Stanford, SEA, SOLE, Toronto, Trinity College Dublin, Wesleyan, Wharton, and Yale. They thank David Lee, Tamri Matiashvili, Elisa Heinrich Mora, Maxwell Rong, Amanda Wahlers, and Qiyi Zhao for excellent research assistance. Fetter and Lockwood gratefully acknowledge financial support from National Science Foundation (NSF) Grant SES-1628860. Fetter gratefully acknowledges financial support from the Stanford Institute for Economic Policy Research. Lockwood gratefully acknowledges financial support from the Bankard Fund for Political Economy. Mohnen gratefully acknowledges financial support from the Alfred P. Sloan Foundation Pre-Doctoral Fellowship on the Economics of an Aging Workforce, awarded through the NBER. The LIFE-M project was generously supported by the National Science Foundation (SMA 1539228), the National Institute on Aging (R21 AG05691201), the University of Michigan Population Studies Center Small Grants (R24 HD041028), the Michigan Center for the Demography of Aging (MiCDA, P30 AG012846-21), the University of Michigan Associate Professor Fund, the Michigan Institute on Research and Teaching in Economics (MITRE), the Russell Sage Foundation (1911-19560), and the Washington Center for Equitable Growth. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.
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