UNDATED – A new economic study warns that cuts to Social Security retirement benefits shorten lives, a finding with particular weight in rural counties and reservation communities of South Dakota and across the Northern Plains where vulnerable populations often rely heavily on the program.
The findings carry new urgency as Social Security trustees project the program’s trust funds will be depleted by 2034, potentially triggering automatic benefit cuts of 19%. With Congress facing pressure to address the shortfall, the research provides the first evidence that such reductions could literally cost lives, particularly among vulnerable populations who depend most heavily on the program.
The paper, from the National Bureau of Economic Research, examines the so-called “Notch” change in 1977 that trimmed payments for people born after January 1, 1917. Researchers found that those retirees lived about one month less than those just a year older. The effect was most severe among low-income and less-educated seniors — groups that are disproportionately concentrated in specific areas of the region’s older population.
Local Impact
Social Security is the main source of income for many retirees in South Dakota. About one in six state residents is currently age 65 or older, with projections showing this will reach one in five by 2030. Census data show higher poverty rates among elderly residents in rural counties compared to national averages, with some reservation communities experiencing poverty rates as high as 48%. For families in farming towns and tribal areas, monthly Social Security checks are often the financial backbone. The study’s conclusion — that every $1,000 cut in annual benefits reduces life expectancy by nearly a month — underscores the risks of benefit reductions for vulnerable populations within the state’s aging demographic.
The National Findings
Authors Hamid Noghanibehambari of Austin Peay State University and Jason Fletcher of the University of Wisconsin–Madison analyzed death records from the Social Security Administration covering millions of retirees. Their difference-in-difference approach compared “Notch” cohorts with adjacent birth years, correcting for broader mortality trends. The results show a negative impact on both income and longevity, growing larger after age 80.
The authors calculated that the 1977 policy change cut average retirement income by about $1,141 a year (in 2020 dollars). They estimate that the 123,000 people in the Notch cohort collectively lost $1.3 billion in value of life years.
Reversal of Earlier Research
An influential 2006 study had suggested benefit cuts might improve mortality outcomes in the short term. But with longer data and newer records, Noghanibehambari and Fletcher find the opposite: the long-run effects show statistically significant harm. When tracked over 10 or 20 years, smaller checks clearly meant shorter lives.
Why It Matters Now
The Social Security trustees project the trust funds will run short in 2034, leaving enough revenue to pay only about 81 percent of scheduled benefits unless Congress acts. The NBER paper warns that broad reductions could have measurable mortality costs, especially for seniors in rural areas and low-income communities such as those found in parts of South Dakota, North Dakota, and Nebraska.
For policymakers in Pierre and Washington, the findings tie dollars directly to years of life. As Congress weighs options to shore up the program, the study shows that the stakes are not just financial — they are life and death for the most vulnerable retirees on the Plains.