Social Security Benefits Support 12 Million U.S. Jobs and Generate $2.6 Trillion in Economic Output, According to New National Institute on Retirement Security Report
New Social Security State Fact Sheets Detail Local Economic Impact
Webinar on Nov. 20th to Review Findings
WASHINGTON, D.C., October 30, 2025 – New research from the National Institute on Retirement Security (NIRS) finds that Social Security benefits play a powerful role in supporting the U.S. economy, generating $2.6 trillion in total economic output and supporting more than 12 million American jobs in 2023 alone.
Quantifying the Economic Impact of Social Security Benefit Spending examines the national and state-level economic impact of Social Security benefits paid to retired workers, surviving spouses and children, and Americans with disabilities. The analysis shows that $1.38 trillion in benefits paid to more than 67 million beneficiaries supported $804.6 billion in labor income, $1.6 trillion in value added (GDP), and $363 billion in tax revenues for federal, state, and local governments.
The report also models what could happen if Social Security benefits were cut due to the program’s projected trust fund shortfall. A hypothetical 19 percent reduction in benefits would shrink the program’s economic impact by more than 16 percent, reducing GDP by hundreds of billions of dollars.
To complement the national analysis, NIRS also is releasing a series of state fact sheets highlighting the economic impact of Social Security in each state, including the number of jobs supported, total output generated, and tax revenues contributed. These fact sheets illustrate how critical Social Security is to sustaining local economies nationwide.
Read the research and state fact sheets.
Register for a webinar on Thursday, November 20th at 2 PM ET to review the research.
“Social Security is more than just a retirement benefit. It’s a vital contributor to the national economy,” said Dan Doonan, NIRS executive director and report co-author. “Every dollar paid out in Social Security benefits supports two dollars in total economic activity. These benefits not only provide financial security for millions of Americans, but they also sustain jobs, generate tax revenue, and keep local economies strong, particularly in small towns and rural communities. As policymakers debate how to ensure the long-term solvency of Social Security, they should remember that benefit cuts wouldn’t just harm retirees: they would ripple through every community in America,” Doonan said.
The report finds that Social Security benefit expenditures have large multiplier effects, especially in sectors such as food services, healthcare, and retail trade. The economic impacts are felt in every state, with California leading in total output and employment supported. In states such as Florida, West Virginia, and Michigan, Social Security benefit spending supports more than seven percent of the total labor force.
“Social Security provides an irreplaceable stabilizing force for the economy, especially during economic downturns,” said Tyler Bond, NIRS research director and report co-author. “Because benefits are paid consistently, even when the economy weakens, Social Security helps keep consumer demand steady and supports jobs across the country. Its impact reaches far beyond retirees and other beneficiaries. Social Security benefits everyone from coast to coast.”
Key Findings
- $1.38 trillion in benefits paid to 67 million beneficiaries in 2023.
- Supported 12.2 million jobs and $804.6 billion in labor income.
- Generated $2.6 trillion in total economic output and $1.6 trillion in GDP.
- Produced $363 billion in federal, state, and local tax revenues.
- Each $1 in Social Security benefits supports $2 in total economic activity.
- State-level fact sheets reveal strong economic impacts in all 50 states and D.C.
Methodology
The analysis uses IMPLAN, an input-output modeling system widely employed by economists to assess local and national economic impacts. NIRS modeled Social Security benefit payments as household income expenditures, accounting for state-level differences in taxes, savings, and spending patterns. The model measures impacts across four key dimensions — employment, output, GDP, and tax revenues — both nationally and for each state.
This research was made possible through generous funding from AARP.
The National Institute on Retirement Security is a non-profit, non-partisan organization established to contribute to informed policymaking by fostering a deep understanding of the value of retirement security to employees, employers and the economy as a whole. Located in Washington, D.C., NIRS membership includes financial services firms, employee benefit plans, trade associations, and other retirement service providers. More information is available at www.nirsonline.org.
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