The Effect of US COVID-19 Excess Mortality on Social Security Outlays

The COVID-19 pandemic has resulted in significant excess mortality among the US population, impacting the future outlays of the US Social Security Administration (SSA) Old Age, Survivors, and Disability Insurance (OASDI) program. This study aimed to estimate the net effects of pandemic-induced excess deaths on OASDI liabilities, utilizing dynamic microsimulation models, and examined how these effects vary across different socioeconomic and racial-ethnic groups. Data on excess deaths were obtained from the CDC and processed to account for seasonal variations and demographic disparities. The simulation incorporated demographic and health status variables to project OASDI retirement and disability benefits, and survivors’ benefits for spouses and children, for respondents with highest COVID mortality risk. The pandemic resulted in approximately 1.7 million excess deaths among individuals aged 25 and older between 2020 and 2023. These premature deaths reduced future retirement payments, which increased the Social Security fund by $294 billion. However, this gain was offset by reductions in future payroll tax flows ($58 billion) and increased payments to surviving spouses and children ($32 billion), resulting in a net impact of $205 billion. Non-Hispanic Black and Hispanic decedents left behind more underage children per capita, yet payments to their surviving family members were lower compared to non-Hispanic White decedents, across all educational levels. Excess mortality during the COVID-19 pandemic has complex implications for the OASDI program. While there is an estimated net positive financial impact due to reduced future retirement benefits, this effect is mitigated by decreased payroll tax contributions and increased survivors’ benefits. The differential impact by race and ethnicity highlights existing inequalities and underscores the importance of considering demographic disparities in future projections of Social Security liabilities. These findings provide critical insights for informing SSA trust fund projections and policy decisions.

The full study can be viewed at National Bureau of Economic Research.

Heun-Johnson, H., Lakdawalla, D., Reif, J., & Tysinger, B. (2025, February). The effect of US COVID-19 excess mortality on social security outlays. NBER. https://www.nber.org/papers/w33465