Abstract
The present study documents and models Latinos’ pension participation likelihood relative to non-Hispanic Whites and non-Hispanic Blacks. Multivariate regression methods were used to analyze data from the 1996 Survey of Income and Program Participation (SIPP) panel which was collected from April 1996 to March 2000. Results indicate that Hispanics and non-Hispanic Blacks were significantly less likely to participate in pension plans (defined contributions plans such as 401k and 403b) than non-Hispanic White Americans. In multivariate analyses where demographic background, industry and occupation characteristics, availability of affordable pension plans, and eligibility statuses were specified, there was still a significant net racial effect in predicting the DC pension participation likelihood.
Highlights
The improvement of the living standards of older Americans over the past thirty years has been a stunning victory for U.S social policy
Logistic regression analysis was used to assess whether participation rate differences in DC pension plan between Latinos, non-Hispanic Whites, and Non-Hispanic Blacks can be explained by differences in personal demographic characteristics, socioeconomic status, and job characteristics
The likelihood of participation in a DC pension plan was decreased for Latino workers by 50.7 % and for non-Hispanic Blacks workers by 52.1 %, compared to non-Hispanic White workers
Summary
The improvement of the living standards of older Americans over the past thirty years has been a stunning victory for U.S social policy. The transition from DB to DC plans results in low pension participation rates and low retirement savings for Americans, resulting in financial insecurity for the new cohort of elderly (Even and Macpherson, 2007; Farkas and O’Rand, 1998). This financial insecurity for American elders will threaten the economic well-being of the new elder cohort, especially when considering the increased life expectancy of the average American. Suggestions on reforming the current security system and reducing racial disparities in pension participation rates will be provided
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