Collectivism: An American Safety Net

Abstract

In the face of deepening economic precarity, Americans have been turning to one another for informal support. What is the value of this collectivist safety net? Through a combination of anthropology and economics, this study introduces a way to measure collectivist practices. Applying this methodology to data from the 2014 Survey of Income and Program Participation, we investigate the extent of collectivism across the age distribution, focusing in particular on collectivism’s impact on retirement savings, its relationship to near retirees’ proximity to meeting their savings targets, and its effect on the wellbeing of elderly Americans. Contrary to the myth that the elderly are a financial burden on society, relatively few seniors receive collectivist support--only 8%. But for those who do receive that support, it makes up 31-43% of their total income. Among pre-retirees ages 55-66, collective assets comprise 12-18% of total personal savings. Taking into account the value of Social security assets, 86% of pre-retirees without collective assets meet or exceed their retirement savings target, but that figure jumps to 94% for Americans with collective assets. These results highlight the importance of accounting for collectivist support in the portfolios of aging Americans.