xt79gh9b705j https://exploreuk.uky.edu/dips/xt79gh9b705j/data/mets.xml Kentucky Agricultural Experiment Station. 1956 journals 044 English Lexington : Agricultural Experiment Station, University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. 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Milton Coughenour and John R. Christiansen 1 University of Kentucky Kentuclqr Agricultural Experiment Station ` Lexington In Cooperation With Agriculture Marketing Service United States Department of Agriculture Y KENTUCKY FARMERS AND SO IAL SECURITY x:.r _ 1. It is estimated that by the end of 1956: 7 (a) Approximately 7 out of l0 farmers in Harrison county will be insured by OASI. This will be true of fewer than 4 out of 10 , farmers in Menifee and Wolfe counties. (b) Two out of every eight farmers in Harrison county and three out of eight in Menifee and Wolfe counties will not have Social Security protection even though their income has been adequate. = (c) One in 20 farmers in Harrison and l in 5 in Menifee and Wolfe counties will not have Social Security protection because of inadequate income. (d) More old than young farmers in each area will be ineligible for QASI because of low incomes. However, in Menifee and Wolfe counties more of the older than the younger eligible farmers will be insured. (e) Approximately l in l0 of the farmers in each study area will be receiving, or will be eligible for, retirement payments. (f) About 7 out of l0 and 4 out of 10 farm operator families in Harrison and in Menifee and Wolfe counties, respectively, will have OASI protection for minors. 2. The results of this survey revealed that in Harrison county, those classed as "best informed" and "least informed" about QASI comprised I 37 percent and 16 percent, respectively, of all farmers. In Menifee and Wolfe counties, the "best informed" and "least informed," classi- ` fied on the same standards, comprised 26 percent and 28 percent, respectively, of all farmers. 1 (a) Farmers who have the most schooling also were the best informed about OASI. 3. As their source of "most information" about OASI, the Harrison county farmers preferred the newspaper more often than any other source; l in U gave this source. In Menifee and Wolfe counties, friends and family members were the most frequently mentioned source , of "most information"; one in three gave this answer. In each study area, no more than l in 10 mentioned the Social Security representa- tive, and similar or smaller numbers mentioned the county agricultural agent and pamphlets from the Social Security or Extension offices. (a) Among the better—educated farmers, the newspaper predominates as the source of "most information" about OASI. Among those with less education the radio is most frequently used for this purpose. - 1 - I - 2 - 4, The most effective media in spreading information about OASI, 2 judging from how well informed the farmers were who use them as sources of “most information," were the representatives of the Social Security Administration and the Extension Service, followed by the newspaper and magazines. Radio and television, friends and family members, and "local functionaries“ were much less effective on the basis of this measure. 5. Approximately 9 out of every 10 farmers in each study area gave general approval to the OASI program as they knew it. (a) The closer to retirement age farmers get the less inclined i they are to express reservations in their approval of OASI. . 6. The principal reason most farmers gave for liking OASI was that it is a form of retirement insurance or annuity, The survivors benefit feature of OASI was much less often mentioned. 7. Only about half of the farmers contacted stated an objection to GASI or any phase of the program as they knew it, Fewer still mentioned a specific source of dissatisfaction. (a) Although no more than 8 percent of the farmers in Harrison county named any one source of dissatisfaction with OASI, 16 percent in Menifee and Wolfe counties were dissatisfied with the provisions (at the time of the survey) for determining retirement age. - 3 H KENTUCKY FARMERS AND 5OClAL SECURITYI Earnans; Attitudes and .11ra.te.¤;._ti<>¤.. Qld asa in éanriackz Qouuai-ar; s G, M, Coughenour dg Ra Christiansen — e Department of Farm Population and Rural Sociology Rural Life Branch University of Kentucky Agricultural Marketing Eervice U.S, Department of Agriculture Two years ago a survey of Harrison county, Kentuoky,2 indicated that nearly 9 out of every lO farmers were favorably disposed toward the Old Age and Survivors lnsurance (hereafter, "OASI”) program as they knew it, and over three·fourths wanted to be covered, Nithin a matter of weeks the wish became reality when the Social Security Law was amended to ` include self—employed farm operators and many additional farm wage workers; For the first time large numbers of farmers whose earnings were sufficient to enable them to qualify for OASI had an opportunity to take advantage of the twin provisions of protection in their old age and for their dependents: The added security gained by individuals and families gives promise · of stimulating profound changes not only in plans and future activities a of families but also in local communities and the state as a whole; For the purpose of assessing some of the results of the l95M Social Security Amendments, a survey3 was made in the spring of 1956 of 550 farmers in Harrison, Menifee; and Wolfe counties, While the scope of the survey was quite broad; the present report is limited to the main aspects of ` farmers’ knowledge, attitudes, and insurance protection in regard to GASI. LThe survey was a cooperative project between the Department of Rural Sociology, Kentucky Agricultural Experiment Station and the Farm Population and Rural Life Branch, Agricultural Economics Division, Agricultural Mark- eting Service, USDA; 2R¤hsf€> Gel?-way, Eos §.e.<;ur.-ity in Qld Aaa- Kyr Agr. Expt, Sta, Bull 526: Lezingtonn By, ETS}. p 291 3 . - - , Since the survey was made during the spring of i9§6, the design of the . study, as regards specific provisions of the OASI program, neither anticipated nor was influenced by the l956 Amendments to the Social Security Law, Estimates of the extent of coverage and participation by farmers in QASI as well as their knowledge of the program are based on the provisions of OASI existing at the time of the surveyn Harrison county typifies the Outer Blue Grass Economic Area,Q and x in this report it is referred to as the "Blue Grass county.“ Possessing rather favorable climatic and physiographic characteristics for farming, V this area stands high in comparison to the rest of Kentucky on most in- dices of agricultural and non—agricultural production; transporatation and communication are well developed; and the level of living of farm families is high. Menifee and Wolfe counties are typical of the mountain » farming area of the Cumberland Plateau Margin and are referred to as the “Mountain counties" in this report. The uneven topography of these counties is unfavorable to farming; the people are relatively isolated; and the production of economic goods and the level of living of farm families is low. Thus the two sample areas where the survey was made come near representing the range of variation within the state in these ‘ ` respects. I · ‘ The area sampling method was employed to select a sample in each county that would be representative of the farmers in that county.5 Since the counties typify the economic areas of which they are a part, the ` samples should be representative in a general way of the two areas. The ` U data secured should, to a considerable extent, indicate the extremes or the range of variation in the situation with respect to GASI and Kentucky farm families, I Only farm operators, as defined by the U. S. Census, were interviewed. However, this includes both partetime and full-time operators. Farm wage workers, who were not interviewed, are relatively few in these counties. Farmers' OASI Protection After 1956 By 1957 approximately 7 out of every lO farmers in Harrison county will meet the minimum requirements for Social Security protection if they carry out their plans for 1956 reported during the survey. However, fewer than 4 out of lO farmers in Menifee and Wolfe counties will meet Q . See State Economic Areas. U. S. Department of Commerce, Bureau of the Census, U. S. Gov‘t Printing Office, Hashington, D. C., l95l, 5 The sample for each county was drawn from the "Master Sample" » sampling materials of the Agricultural Marketing Service, USDA. See Arnold J. King and Raymond J. Jessen. "The Master Sample of Agriculture, I, Development and Use; II, Design,“ Journal of ph; Ame;igap_§tatistical Association. March l9U5, pp. 38-56. these requirements (Table 1).6 These estimates are based on the farmers' ' reports of OASI taxable non·farm and farm earnings for 1951 through 1955 and their expectations and plans for 1956,7 This difference between the areas in the proportion with QASI protection is partly accounted for by . the larger proportion of the farmers in the Mountain counties who did not have the required minimum earnings for coverage. These farmers, therefore, were ineligible for OASI. Equally significant, however, is I the failure of many mountain farmers who had more than the minimum earnings to file their tax returns. , When farm earnings are great enough for participation in the GASI program, non~participation is due to the failure to use appropriate options or otherwise to comply with the provisions of the Social Security Law. For whatever the reasons, 2 out of every 8 farmers in Harrison county will be eligible but will not have OASI protection at the end of 1956. An even larger group of farmers will be in this condition in the Mountain counties where 3 out of every 8 will be eligible but not covered by QASI. If all farmers in each study area had used their opportunities, by 1957, s 95 percent of the farmers in the Blue Grass county and slightly fewer than 80 percent of the farmers in the Mountain counties could have obtained OASI protection. Farmers' Insurance Protectign gn_Relatign tg Their gg; In both study areas the percentage of farmers whose earnings were insufficient for OASI coverage increases with age (Table 1). In Harrison county all of the farmers in the sample who were thus ineligible to participate in the OASI program were 50 years of age or older. In the Mountain counties, farmers 50 years of age or older were much more often unqualified than were younger farmers. In the Mountain counties, but not in the Blue Grass county, a larger proportion of younger than of 6Whenever a difference between the two study areas is given in this report it is statistically significant at least at the 5~percent level. Statistical significance has been determined by using Vernon Davies, "Table Showing Significance of Differences Between Percentages." Washington ` Agricultural Experiment Station, The State College of Washington, Pullman Washington, Station Circular 102, September 1950. All associations between two variables (such as that between age and OASI coverage) given in this report are also statistically significant at least at the five percent level, However, in these cases the chi»square test for the significance of association was used. - VOASI taxable earnings much have been sufficient for the worker to have earned at least one quarter of coverage for each two calendar quarters that have passed since December 31, 1950, or to have earned a quarter of coverage for each calendar quarter after 195b. Although this basis of estimating GASI protection is satisfactory ' for purposes of this survey, it is iumrecise for farmers who had some OASI coverage because of nonfarm employment prior to 1951. l 6 - older farmers have not filed Social Security tax returns. Proportionately twice as many of the farm operators under 35 years of age are without OASI _ protection as those aged 65 or older. The interpretation that the incentive to file OASI tax returns increases as retirement age approaches seems to be appropriate here. ‘ Farmers' Insurance Protection.}; Relation.;p Thgi;_§gg Worth For both study areas, as shown by Table 2, the proportion of farmers under 65 years of age who have Social Security protection increases as net worth increases, particularly up to $l0,000¤ In the Blue Grass county the percentage of those with Social Security protection who are 65 years of p age or over also increases in accordance with net worth. By contrast, in both study areas the percentage of those, otherwise eligible, who fail — to meet the requirements of the OASI program declines as net worth increases. Since net worth has a recognized relationship to income and the latter to eligibility for OASI, one would expect to find net worth also associated I with eligibility for QASI. This expectation is only confirmed by the data - for the Mountain counties, particularly by the much larger proportion of — farmers with insufficient earnings who had net worths of less than $5,000 _ as contrasted to those who had this amount or largerq In the Mountain counties, eligiblity for OASI thus is inversely related to need insofar as the latter may be indicated by net worth. Estimated Retirement Payments By the end of 1956 it is estimated that approximately 10 percent of the farmers in each study area will qualify for retirement payments, Based on the average of the two or more highest years of OASI taxable earnings, 1951 to 1956 inclusive, retirement payments for the 23 eligible farm families in the Harrison county sample will range between $360 and $1,375 annually.8 ` Payments to 10 farmers, or QU percent, will range between $360 and $775 'I annually while the remainder will receive between $776 and $1,375 annually. &Estimated benefits were computed on the basis of estimated maximum OASI taxable income. That is, it was assumed that farmers will elect either their actual net earnings or one-half of their gross farm income, whichever is the higher, in order to maximize their net earnings for OASI purposes. Although QASI taxable income was obtained for the years subsequent to 1950, in figuring benefits it would be to the advantage of nearly all farmers to , use the drop—out privilege and to compute their maximum average annual or monthly OASI taxable income on the basis of their 1955 net income and that projected for 1956. Since it is unlikely that all farmers will report their maximum taxable net income the estimates of retirement pay- ments given here might be considered as an upper limit, The smallest annual benefit paid by O SI to those who qualify for retirement payments is $360. - 7 W h Inasmuch as farmers‘ average annual incomes are lower in Menifee , and Wolfe counties than in Harrison county, estimated annual payments also are lower. This is so despite the fact that, owing perhaps to the larger number qualifying for retirement payments, the estimated payments range up to a higher top figure than in the Harrison county sample. For the 33 farmers in the Mountain counties who are eligible c ‘ for retirement, estimated payments will range between $u6o and $1,700 p annually. However, for 20 of these farmers (59 percent) retirement , payments will range between $360 and $775 annually, while the remainder will be entitled to sums ranging up to $1,700 annually. Since the annual QASI taxable income for most of these farmers has averaged less than $1,200, they can receive the full benefit payments . without reducing their farm operations. Retirement payments thus will bring a net increase in annual income for as long as the farmers can maintain their present scale of farm operations. Estimated Survivors' Payments Upon the death of an insured person, the surviving minors are entitled to OASI paymentso By the end of 1956 approximately 71 percent of the farm families in the Blue Grass county and 39 percent of those in the Mountain counties will have this protection (Table 1). Of the farmers who are insured, 30 percent in Harrison county and 21 percent in Menifee and Wolfe counties will have no eligible survivors 0 (Table 3). From this standpoint the survivors' insurance feature of the OASI program is attractive to more farmers in the Mountain counties. How- I ever, in genenal, the dependent minors of self—employed farmers in Harrison county are more heavily protected than those in Menifee and Wolfe counties, For example, in event of death of the insured, 25 percent of the families in Harrison county would receive initial monthly payments ranging from J $1Ml to $200,9 whereas this is true for only 9 percent of the families in Wolfe and Menifee countiesc What Farmers Know About Qld gg; and Survivors Insurangg A person must have a certain minimum of information about the OASI program in order to avail himself of it. First, it is necessary for an individual farmer to know that income earned from farming is now consid- ered as taxable income for OASI purposes, Second, he needs to know that I 9Estimated protection for survivors at the end of 1956 was computed by assuming that there would be no increase or decrease in the number of dependent minors from the time of the survey until the end of 1956 and that farmers exercised the appropriate options in order to maximize their average monthly QASI taxable income, (See footnote 6.) i. 8 a net farm income above a specified minimum sh uld be reported annua1lyy~ ” It is of course necessary to know many other things about the QASI = program if one is to use it to the best advantage, but these two items appear to be a bare minimum of information needed to participate in the OLSI program. V One of the questions asked was, ins you understand it, can farmers _ take part in the Old Age and Survivors Insurance Program, or are they `· left out of the program?’ During Hay and June of 1956, when the survey b was made, 91 percent of the farmers in Harrison county indicated that farmers could now participate in the 0aSI program. However, only 73 percent of the farmers contacted in Menifee and Wolfe counties knew that ‘ farmers could participate in OASI. Thus, more than 1 out of every 4 _ farmers in the latter area lacked this basic information at the time of ‘ the survey. — Bach respondent also was asked, las you understand it, if a man operates a farm, how often should he make a report on his farm earnings for Social Security purposes: every 3 months, or once a year?’ In ‘ Harrison county 80 percent of the farmers contacted gave the correct I - answer, *once a year,“ as did 62 percent of those in Menifee and Wolfe counties. Thus, 1 out of 5 in the Blue Grass county and nearly 2 out of 5 in the Mountain counties did not know the correct time for making a report. Undoubtedly the lack of inform tion about OASI contributes to the failure of many farmers to participate in this program. In accordance with the objective of systematically measuring knowledge about OASI, farmers were questioned with respect to 18 different aspects of the program. From their responses a scale of J k¤°Vl°d8¤1O was constructed, and each person was assigned a rank or score representing his knowledge about QASI relative to other farmers. As scaling implies, a farmer with a given knowledge score normally knows everything about OASI that those with lower scores know plus some additional information. Also by virtue of this fact, rarely does a far er who is assigned a given knowledge score have correct informa- V tion about specific features of the OASI program appropriate to those with higher scores. The first knowledge category comprises the farmers who were 'least 1nformed* about OLSI, i.e., they lacked information about the two items noted. Those falling in the second knowledge category were informed about these matters and also knew that (l) when a man dies his survivors receive benefit payments, (2) farmers now past the age of 65 must pay OASI taxes for a certain period of time before becoming eligible for " retirement payments, and (3) QASI benefit payments are dependent upon """°"""°`°°"""”`""`""`”"`"””°”"°""““'°"”'°"”""""""""7"` , 10The 'H#technique,' as developed by 5. A. Stouffer and his associates, was used in scaling knowledge. See S. A. Stouffer, E. F, Borgatta, D. G. Bays, and.A. I. Henry, 'A Technique for Improving Cumulative Scales,Y ggblgc Quinlan Rnarjaxlx. V¤1· 16. pp. 273-91· - 9 - the amount of earned incomeg Eowever, they lack much other information c, as indicated below, This second group is designated the "poorly informed.“ In addition to the foregoing facts about GASI the "fairly well informed" farmers (third knowledge category) recognized; (1) that the QASI program is administered by the federal government; (2) that, if a farm employee is eligible for GASI coverage, both the employer and employee pay taxes on his wages; and, (3) that a farmer who is eligible for retirement pay- . ments can have some income from employment and still receive his full retirement payments The "best informed" farmers are distinguished from the others because they were acquainted with all of the foregoing features of the OASI program, and also knew that (1) QASI coverage does not entitle a person to unemployment compensationsg (2) GASI does not pay job accident benefits, and (3) the land owner‘s cash or share rent does not count as . income for OASI purposesoll In Harrison county the "best informed” farmers represented 37 percent of all farmers (Table M)¤ "Least informed" farmers were frequently encoun- tered, however, since 16 percent were in this class, Knowledge about QASI thus seems to be less extensive in this county than might be hoped for, especially since nearly a fourth of the farmers were failing to participate in the program even though they were eligible, By comparison, farmers in the Mountain counties were much less well informed. In the latter areag the “best informed" farmers included only 26 percent of all farmers? and 28 percent were "least informed." Undoubtedly, the poor level of partici- pation in the QASI program in the Mountain counties is related to the lack of necessary informationr , Relation gf Farmers“ Education gg Knowledge about GASI In both study areas, knowledge about GASI was directly associated with the respondent's general education (Table M), Only among those farmers who had 9 or more years of schooling did the "best informed" predominate. In the Blue Grass county more than 9 out of lO of those ‘ who had gone to high school were either "fairly well informed" or "best informed." The situation is much the same for the Mountain countiesr In general, therefore? differences between the two study areas are much less when persons of the same educational level are compared. Much of the difference in knowledge about QASI can be attributed to the marked diversity in the level of general education of farmers in the two study areas, Thirty—two percent of the farmers surveyed in Harrison county had 9 or more years of schooling as contrasted to only 8 percent of the farm operators in Menifee and Wolfe countiest Kherg_Egrmers Qg; Most gf Their Ipfggggtign Farm operators who knew that the OASI program now applied to them · were asked from what source they had obtained mpg; of their information, ll , . A . , e _ ( The legal basis 1or item 3 nas been changed. See footnote 3. - IQ - More than any other source, farmers in Harrison county named the newspaper (26 percent) as their source of "most information" (Table 5). Of next greatest importance were friends (19 percent), and "local functionaries" (lawyers, local post office employees, local school teachers, and the like) (l9 percent). Twelve percent also mentioned the radio as their A source of "most information.“ Neither the county agricultural agent nor the Social Security representative was mentioned as a source of "most information" by as much as 1O percent of the farmers. By contrast to the Blue Grass county, friends and family members were most often mentioned as sources of “most information" (32 percent) by farmers in the Mountain counties. Next in order of importance were radio, a Social Security representative, and newspapers; these were mentioned by 19, ll, and 10 percent of the farmers, respectively. Each of the remaining sources was mentioned by less than l in 10 persons ` interviewed. While a significantly larger proportion of Menifee and Wolfe countians used friends and family members or radio as sources of "most information,“ significantly fewer used either the newspaper or "local functionaries" for this purpose. Source gf Most Information.ip Relation to Farmers' Education Farmers' use of particular sources of “most information," such as newspaper and radio was markedly associated with their education (Table 5). In the Blue Grass county 22 percent of the farmers with less than 8 years of schooling named the radio, as compared with only Q percent of those with 9 or more years of schooling. Similarly the newspaper was used by 9 percent and 35 percent of these two groups of farmers, respectively. In the Mountain counties, the use of the radio, newspaper, Social Security Administration personnel, friends and family members is related to educa- tion. The better educated predominated among the farmers who used the representative of the Social Security Administration as a source of "most information.“ On the other hand, the bulk of the farmers who mentioned , friends and family members had less than 8 years of schooling. In summary, one might say, for the Blue Grass county farmers, that those who could read readily made use of the newspaper as a source of "most information" about GASI, whereas the radio filled this gap for those with less reading ability. Similarily, in the Mountain counties, the better-educated relied more heavily upon both the newspaper and the Social Security Administration personnel while those with less education counted upon the radio and friends. Differences in levels of education for the two study areas accounted for much of the difference in the use of various sources of information. For instance, when only those with less than 8 years of schooling are considered, about the same proportion in Harrison and in Menifee and Wolfe " counties (22 percent and 2U percent, respectively) named the radio as the source from which they obtained the most information. Differences between the areas are also small when the other two educational categories are considered separately. - ll - l Effectiveness pf Types pf Sources gp Spreading Information About OASI Q For further analysis, the sources of “most information" were combined into these categories: radio and television; newspapers and magazines; local Social Security office, county agricultural agent, and pamphlets dispensed through these offices; friends and family members; and local functionarieslguch as lawyers, employers, local school or postal officials, and the like. I In Harrison county these types of sources range in importance from newspapers and magazines, considered by 29 percent of the farmers as their source of "most information,“ to radio and television which were mentioned by lj percent (Fig. 1). .In the Mountain counties, the relative importance of friends and family members is immediately noticable; it was listed by about a third of the farmers. Approximately l in 4 farmers had obtained most of their information through the local Social Security office or the county agricultural agent. Radio and television were named by nearly as many. The remaining sources were much less important. If one is trying to increase the information which people have about a particular program it is important to know how effective each channel has been in spreading the information. In an effort to assess the relative effectiveness of the source from which farmers get OASI information, an "index of effectiveness" was computed for each of the types of sources listed above. The index numbers are shown in Fig. l. This index is the percentage of farmers in each source—of~information group who are classified as "best informed" about OASI. In Harrison county, · for example, 57 percent of the farmers who gave the Social Security office, the county agricultural agent, and pamphlets as their source of "most information" were "best informed" about QASI, giving this type of source the highest effectiveness rating. In this respect, newspapers and maga- zines were nearly as effective, so far as Harrison county farmers were r concerned; the remaining sources were much less so, In Menifee and Wolfe counties the relative effectiveness of the various sources is much the same as in Harrison. Of course, farmers use many more sources than the one indicated as a source of "most information." Insofar, however, as the index is a good me