Beneficiaries Prefer To Work by MARGARET L. STECKER *

OST old people work as long receiving monthly old-age insurance jobs, or they lost their jobs because as they can and retire only benefits was as follows: the employer went out of business or M because they are forced to do for similar miscellaneous reasons not so. Studies of old-age insurance ben- Year Percent related to their personal circum- 1941____---____-_--______20 eficiary “retirements” between 1940 1942--_------__------29 stances. Many were let out during and 1947 show that only about 5 per- 1943~___~~~~~__-_~~~-~~~-~~~~~~~-~~ 31 the later years of the depression, cent of the men and women entitled 1944-_---_--___------30 when the easy labor market led some to old-age benefits in those years left 1945-__-----___-_-_-______30 employers to retain or hire only the their jobs of their own accord, in good 1946--_-----__------____---_-_-__- 36 young and most efficient workers and health, to enjoy a life of leisure. They 1947~__-~~~~_~~__~~_-______-_____ 43 when companies with a compulsory also show that in given years from a 1948_-_---_--__------_---___- 48 retirement age tended to enforce the fourth to a half of the beneficiaries 1949--_----__-__-_---______-_____ 52 rule rigidly. During the war years, 1950------_-_------____------59 had some employment after their on the other hand, companies were entitlement. In 1940 the country was emerging incbned to retain their older em- from a great depression; during the ployees, and oldsters who lost their Retirement of Workers Aged 65 next 2 years employment was build- jobs had less difficulty in finding ing up to its 1943-44 wartime peak; others. and Over after 1945, marginal workers had Most beneficiaries whose jobs were terminated during the peak year of From 1940 to 1945-the first 5 years greater dif&ulty in retaining their jobs and in getting new ones. Not all the wartime demand for labor quit during which monthly benefhs were because of their health. They were paid--less than a third of all the men the old people who were eligible for benefits but not receiving them were sick or disabled, they thought that and women aged 65 and over who they were too old to continue working could have drawn old-age insurance at work-some whose jobs were ter- minated, particularly during 1940. did or that their jobs were too hard for benefits by retiring from covered em- them, or they left their jobs for other ployment took advantage of the op- not apply for benefits because they hoped for early reemployment or did reasons related to their physical or portunity to do so. During the next mental condition. 5 years the rate of retirement was not know of their rights under the insurance program-but it is fair to . After the war, dismissal by the em- speeded up considerably, so that on ployer became almost as important January 1, 1950, the proportion of presume that, whether entitled or not, most of them were employed. a reason for job termination as it had fully insured aged workers actually been in prewar years; retirements for receiving benefits rose to almost Reasons for Retirement company reasons were relatively more three-fifths. As of January 1 of each numerous in 1947 than in 1946. year, the proportion of fully insured Most workers who filed their claims In each period a comparatively few persons aged 65 and over who were for old-age insurance benefits did so beneficiaries left their jobs for per- because they lost their jobs or were no sonal reasons not connected with *Division of Program Analysis, Bureau longer able to continue working. The their health. They wanted to retire of Old-Age and Survivors Insurance. reasons for terminating their last 1 Studies of beneficiary “retirements” to enjoy their last years; they had are part of the general study of the re- covered jobs before entitlement as re- sick wives to be taken care of; they sources of old-age and survivors Insnr- ported by 3,500 old men who became had disputes with their employers or ante beneficiaries made by the Division beneficiaries in 8 large and 12 middle- fellow employees; or they quit on their of Program Analysis in 20 cities between sized cities between 1940 and 1947 are 1941 and 1949. See the Bulletin for July own initiative for other reasons. and September 1943: ; Janu- shown in the table, page 16, column 3. ary, April, September, and ; Relatively more of the beneficiaries Ability to Work ; August and ; who became entitled in 1940 than of February and ; November those in the later years lost their jobs. When questioned as to their ability 1949; and April and . See also These men were released by the em- to work 1 to 3 years after entitlement, the Bulletin for & comparison these beneficiaries expressed varying of aged insurance beneficiaries with aged ployer with or without retirement pay assistance recipients and the aged in the because they had reached the com- general population, and the October 1949 pany retirement age or because the 2Entltlemente early in 1940, when issue for a study of public assistance sup- monthly benefit payments began, in- plementatlon of income of Insurance employer considered them too old or eluded men and women who had been beneficiaries. incapacitated to continue in their out of work as long as 2 years.

Bulletin, January 1951 15 opinions. Slightly more than two- Return to Work After any qualification, that they were fifths of the ones interviewed at the Entitlement able to work and were actually em- end of the employment years 3 1940- ployed in the 194344 employment 42 and 1948-49 reported that they Although employment within a few year constituted 24 percent of all the could not work at all. Inability to years after entitlement occurred less beneficiaries; the proportion was frequently among beneficiaries who work was much more common among nearly as large (22 percent) in 1946- the men whose jobs were tenminated quit their jobs for health reasons than 42, but immediately after the war, in during the war years, for relatively among those whose employment was 1945-46, it was only 9 percent, and in more of them had quit their jobs on terminated for other reasons, many 1948-49 only 16 percent. account of their health; roughly a of the first group later recovered suf- Regular employment of elderly half to three-fifths said they could ficiently to engage in gainful occu- beneficiaries at full-time wages was not do any kind of work. A fifth to pations of some kind, especially dur- comparatively rare in the earlier a third of all the beneficiaries studied ing the war years when the labor mar- years; in many instances, earnings ket was most favorable. During at the different periods, however, were scarcely more than driblets, 1943-44, for example, 42 percent of the thought they could take part-time picked up here and there in casual jobs or do light work suited to their beneiiciaries studied whose health jobs or other work on their own had forced them to stop working in infirmities or lessened vigor. Finally, account. During a la-month period 194142 were employed at least part there were the old men who said between mid-1940 and mid-1942, half without qualification that they could of the year, compared with 69 percent the employed men studied in seven hold down full-time jobs in their cus- of t,he men who had quit far other large cities earned less than $222. tomary occupations; on the average personal reasons and 63 percent of There was some defense and war work a fourth of the beneficiaries inter- those who had been released by their during this period, but full production viewed over the period 1940-49 said employers, had not yet got under way. In that they were able to work and made Two-fifbhs of the men in t.he sample 1943-44, when war industries were no stipulation as to the kind of work who became entitled to old-age in- taking all the manpower they could they could do. By employment year, surance benefits in 1940had some em- get and jobs vacated by younger men the percentage with each reported ployment in 1940-42; more than haIf who entered the armed services made work capacity was as follows: those entitled in 1941-42 had some a place for oIder people, full-time em- employment in 1943-44. The per- ployment of beneficiaries was more centages for these men and for those common and the median earnings of who became entitled in later years are the reemployed old men studied in 12 shown in the tabulation below, cla.ssi- middle-sized Ohio cities were $812. fied by their reported ability to work In 1945-46, while industry and com- at the end of the employment year. -______---I- merce were returning to peacetime 194042’.~...... loo.0 37. 1 20.8 42.1 labor requirements and relatively 194344 2.. _.._. ~. 1no. 0 27.0 24.3 48.7 I , , 194546 3. .._. .~._ 100.0 15.2 26.7 58. 1 fewer beneficiaries were employed, 194%49 b____. -.-- 100.0 22.9 33.9 43.2 /Able to work was steadier and wages had Employmonc work, Light Unable ye3r Total noqual- work to 1 1940 entitlements, 7 large cities. ifica- only work 2 1941-42 entitlements, 12 middle-sized cities. tion Reason for termination of lasf covered 3 1944 ratitlemtnls, Boston. _____ --- employment before entitlement, 4 19iC47 entitlements, Philadelphia-Baltimore. 1940-42 I...... 37. 1 5s. 6 44.0 14. i mule old-age insurance beneficiuries 1943-44 9-m..-.--- 55. 0 68.9 69. 6 29.0 in 20 cities, 1940-47 1945-46aS..-..-.~ 19.9 Z 33.0 4.0 Differences in the men’s estimates 1948-49 ‘-. .-.. 27.5 32.4 2. 1 I of their employability clearly are re- 1941-42 1946-47 lated to the reasons for their retire- 1 1940 entitlements, i lar~-e c&s. Reason Ior job * 194142 entitlements. 12 middle-sized cities. termination ment in the first place, their age, and 3 1944 entitlerr.ents, Boston. 1 1946-G entitlements. Philadelphia-Baltimore. cities 1 sized Boston Balti- the time elapsed since their entitle- cities 2 IIIOE ment. They may be related also to the state of the labor market and the Men who said they were able to beneficiary’s estimate of his chances work, especially if they had no reser- of getting a job. It is probable that, vations as to their capacities, were in general, the beneficiaries overesti- much more frequently employed in Lost jab.. _...__. -. each employment year, of course, than Quit job ___....__ -. mated rather than underestimated He&h...- ._._ --. their work capacity. those who said they could not work Wished toretire-. 4.7 at all. Yet in 194344 as many a.s 29 Other reasons... percent of the latter had at least some J Twelve consecutive months within the 1 Philadelphia, Baltimore, St. Louis, Birmingham, specified period and preceding the inter- employment. Memphis, , and Los Angelrs. Includes January 1941 entitlements in Los Angeles. view. The beneficiaries who said, without 2 In Ohio, population lxtlveen 10,000 and 75,000.

16 Social Security increased so that half the men in the comes’ were lowest as a rule went ployed after their entitlement because Boston study who were employed back to work much more frequently they needed their earnings. earned more than ‘$1,150. In 194849 than beneficiaries whose retirement The facts presented indicate that at the median earnings of the employed incomes were more nearly adequate. least a fifth of the men who become male old-age insurance beneficiaries Roughly 60 to 90 percent of the entitled to insurance benefits in any in the Philadelphia-Baltimore study able-bodied beneficiaries had some year might remain at work in their were $1,574. employment during a la-month pe- regular jobs if their employers were riod within 1 to 3 years after their en- willing to keep them or might take Potential Employability titlement, the proportion depending comparable jobs with other employ- almost entirely on the state of the la- ers if their regular jobs were termi- Only a small proportion of old peo- bor market. Except in the most fa- nated. Another fifth might be ablk ple leave the labor market for good vorable employment period, a majority to take jobs requiring shorter hours unless they have to do so. The psy- of those who said they were able to or less physical effort or in other ways chological factor of hating to be put work and did not have jobs would making less demand on the workers. on the shelf by poor health or the gladly have accepted employment had Part-time jobs might solve the em- loss of a job makes many elderly it been offered to them. Even a few ployment problem of many old people; workers resentful of enforced retire- of the men who said they were not they could work a few hours a day ment. The principal reason they able to work were nevertheless em- or a few days a week and would be glad want to continue working, however, is to do so. Work for some might have that without earnings: they do not to be adapted to their handicaps- 4Money income from 12 months’ old- have resources enough to live at the age insurance benefits, retirement pay poor eyesight, a bad heart, inability to level to which they are accustomed, from a former employer, veterans’ and stand for long hours. Wartime em- or even to meet the cost of their basic union pensions, and annuities; money ployment of old people demonstrated needs. Of the old-age insurance ben- income from trust funds and estates, public and private insurance, and assets; that all that many of them need is a eficiaries studied between 1941 and and the imputed income from an owned chance to show what they are able 1949, those whos.e retirement in- home. to do.

benefit programs. Insurance systems Notes and Brief Reports not national in scope are excluded. J The accompanying chart summa- rizes the general scope of the medical and cash benefits provided, the cov- Benefits and Contributions basic characteristics-either because erage of the systems, and a few as- Under National Compul- they evolved out of such insurance pects of their financing. Further de- systems or were developed as variants tails on the programs for each coun- sory Health Insurance of them. A number of countries pro- Programs try will be found in a comprehensive vide medical services to all or to sub- report published by the Social Secu- stantial groups in the population rity Administration last year.’ The Health insurance is the oldest form through public programs supported chart is based primarily on data from of social insurance. After long ex- from general revenues and usually that report, brought up to date where perience with voluntary programs, employing the physicians on a salary changes have occurred. Only pro- the central mropean countries pio- basis. Such public medical service grams known to be in operation are neered with broad compulsory cover- programs are not included in this included in this summary. age, beginning with the German law summary. In many cases, traditional Several other countries have of 1883, which was followed by legis- criteria for the identification of an adopted laws under which compul- lation in Austria (1888) and in Hun- insurance system are difficult to ap- sory systems will be established. In gary (1891). England adopted com- ply, and some programs that are 1951, health insurance is scheduled pulsory health insurance in 1911. In on the borderline between national to go into effect in parts of and 1924, Chile adopted the first national health insurance and national public in Turkey. , Haiti, and El compulsory insurance law in the medical service have been included. Salvador have enacted laws that may Western Hemisphere. In the Orient, Most of the older health insurance be implemented in the near future. the Japanese national health insur- systems included both medical bene- The effective date of the Swedish ance law of 1922 became operative in fits and cash benefits in partial re- compulsory health insurance law of 192647. placement of wage loss. All the Today, 37 countries have in opera- countries shown here that provide *Carl H. Farman and Veronica Mar- tion either national compulsory con- medical benefits through what can be ren Hale, Social Security Legislation Throughout the World, Division of Re- tributory health insurance programs regarded as a public medical service search and Statistics (ORce of Commis- or programs having many of the same also have contributory cash sickness sioner), Bureau Report No. 16.

Bulletin, January 1951 17