Solvency of Social Security trust funds is essential for the continued financing of federal programs administered by the Social Security Administration (SSA). These programs operate on a pay-as-you-go model where a federal payroll tax instituted under the Federal Insurance Contributions Act (FICA) allocates a percentage of gross wages to finance current and future SSA programming. Benefits of current beneficiaries are paid and the remaining balance is invested in program-specific trust funds to finance future benefits. This research centers the earnings-based contributions that fund SSA programs and SSA trust funds and a social process that may be consequential for program revenue.
This work is interested in whether violent victimization has significant fiscal implications for social security programs. Victimization processes may impact SSA budgets in through at least two avenues. First, victimization can affect tax revenue streams for SSA programs. Adolescent victimization experiences can alter one’s educational and career trajectory in ways that lead to lower lifetime earnings. Also, injuries resulting from a victimization experience could result in an ability to work yielding job displacement and the potential for long-term earnings losses. Both imply lower earnings trajectories and decreased tax revenue to fund SSA programs. Second, victimization experiences can affect the cost of SSA program administration by altering the proportion of the population that is eligible for SSA programs. While both avenues are important and understudied, this research centers on the first.
This work utilizes descriptive quantitative analysis to understand the implications of violent victimization for SSA trust funds and programs. First, data from the National Crime Victimization Survey (NCVS) will be used to discern (a) whether criminal victimization typically leads to earnings interruptions; (b) whether the duration of interruptions differs significantly between victims of firearm related violence versus other types of violence; and (c) whether results to the questions above exhibit heterogeneity across demographic groups. This analysis aims to characterize the short-term consequences of victimization across a large cross-section of survey respondents. Second, data from the National Longitudinal Study of Adolescent to Adult Health (AddHealth) will help determine whether respondents who report being shot or stabbed are: (a) more likely to report an inability to work; (b) completing fewer years of additional schooling after the victimization incident (for adolescents).
