PT - JOURNAL ARTICLE AU - Gary V. Engelhardt AU - Jonathan Gruber AU - Cynthia D. Perry TI - Social Security and Elderly Living Arrangements AID - 10.3368/jhr.XL.2.354 DP - 2005 Mar 31 TA - Journal of Human Resources PG - 354--372 VI - XL IP - 2 4099 - http://jhr.uwpress.org/content/XL/2/354.short 4100 - http://jhr.uwpress.org/content/XL/2/354.full SO - J Hum Resour2005 Mar 31; XL AB - Previous studies of the effect of Social Security on elderly living arrangements generally have relied on data from the distant past or differences in benefits across families or cohorts that potentially were correlated with other determinants of living arrangements. Using data from the 1980–99 Current Population Surveys, we attempt to isolate the causal effect of Social Security on living arrangements with an instrumental-variable approach that relies on the large shifts in benefits for cohorts born from 1910–21, the so-called Social Security notch. Over all elderly households, the estimated elasticity of living with others with respect to Social Security income is −0.4, with elasticities of −1.3 and −1.4 for the widowed and divorced, respectively; most of the effects on living arrangements appear to be concentrated among the lesser educated as well. Our estimated elasticities are substantially larger than those from previous studies and suggest that reductions in current benefits would alter living arrangements significantly.