WI23-07: The Impacts of Racial Differences in Economic Challenges on Housing, Wealth, and Economic Security Among OASI Beneficiaries

Housing wealth comprises 40% of the net wealth of retirement-age Americans, 43% of whom have not yet paid off their mortgage. This study analyzes two research questions. First, to what extent do Old-Age and Survivors Insurance (OASI) benefits promote economic security and racial equity among homeowners? We use a novel administrative data linkage to compare measures of economic well-being before and after homeowners become eligible for OASI benefits. Our measures of well-being include foreclosure, housing stability, and realized housing returns. Our second research question is, how do racial differences in job losses during working age contribute to racial differences in economic security at retirement through exposure to foreclosures? Confidential taxpayer microdata allows us to simultaneously measure racial differences in the incidence of job loss, foreclosure, and wealth destroyed by foreclosure. Our analyses allow us to compare the relative contributions of racial differences in income stability to wealth at retirement through a direct channel (i.e. savings) and an indirect channel (i.e. wealth lost due to foreclosures).