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Labor Supply Responses To Marginal Social Security Benefits
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Book Synopsis Labor Supply Responses to Marginal Social Security Benefits by : Jeffrey B. Liebman
Download or read book Labor Supply Responses to Marginal Social Security Benefits written by Jeffrey B. Liebman and published by . This book was released on 2010 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: A key question for Social Security reform is whether workers currently perceive the link on the margin between the Social Security taxes they pay and the Social Security benefits they will receive. We estimate the effects of the marginal Social Security benefits that accrue with additional earnings on three measures of labor supply: retirement, hours, and labor earnings. We develop a new approach to identifying these incentive effects by exploiting five provisions in the Social Security benefit rules that generate discontinuities in marginal benefits or non-linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved. We find clear evidence that individuals approaching retirement (age 52 and older) respond to the Social Security tax-benefit link on the extensive margin of their labor supply decisions: we estimate that a 10 percent increase in the net-of-tax share reduces the two-year retirement hazard by a statistically significant 2.1 percentage points from a base rate of 15 percent. The evidence with regards to labor supply responses on the intensive margin is more mixed: we estimate that the elasticity of hours with respect to the net-of-tax share is 0.41 and statistically significant, but we do not find a statistically significant earnings elasticity.
Book Synopsis Labor Supply Responses to Marginal Social Security Benefits by : Jeffrey B. Liebman
Download or read book Labor Supply Responses to Marginal Social Security Benefits written by Jeffrey B. Liebman and published by . This book was released on 2008 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: A key question for Social Security reform is whether workers currently perceive the link on the margin between the Social Security taxes they pay and the Social Security benefits they will receive. We estimate the effects of the marginal Social Security benefits that accrue with additional earnings on three measures of labor supply: retirement, hours, and labor earnings. We develop a new approach to identifying these incentive effects by exploiting five provisions in the Social Security benefit rules that generate discontinuities in marginal benefits or non-linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved. We find clear evidence that individuals approaching retirement (age 52 and older) respond to the Social Security tax-benefit link on the extensive margin of their labor supply decisions: we estimate that a 10 percent increase in the net-of-tax share reduces the two-year retirement hazard by a statistically significant 2.1 percentage points from a base rate of 15 percent. The evidence with regards to labor supply responses on the intensive margin is more mixed: we estimate that the elasticity of hours with respect to the net-of-tax share is 0.41 and statistically significant, but we do not find a statistically significant earnings elasticity.
Book Synopsis Social Security and Labor Supply Incentives by : Roger Hall Gordon
Download or read book Social Security and Labor Supply Incentives written by Roger Hall Gordon and published by . This book was released on 1982 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many provisions of the Social Security Program distort an individual's labor supply incentives. In particular, the payroll tax, the earnings test, the offsetting actuarial adjustment, and the dependence of the size of future benefits on the level of current earnings all affect the net return to extra work. The purpose of this paper is to estimate the size of the net tax rate on labor income in a variety of circumstances, taking into account all these provisions, as well as the personal income tax. We find that the Social Security Program on net in the past has provided a large subsidy to labor supply, which for many people effectively offset the personal income tax. This subsidy rate, however, has been declining steadily over time.
Book Synopsis The Perception Of Social Security Incentives For Labor Supply And Retirement by : Jeffrey B. Liebman
Download or read book The Perception Of Social Security Incentives For Labor Supply And Retirement written by Jeffrey B. Liebman and published by . This book was released on 2014 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The degree to which the Social Security tax distorts labor supply depends on the extent to which individuals perceive the link between current earnings and future Social Security benefits. Some Social Security reform plans have been motivated by an assumption that workers fail to perceive this link and that increasing the salience of the link could result in significant efficiency gains. To measure the perceived linkage between labor supply and Social Security benefits, we administered a survey to a representative sample of Americans aged 50-70. We find that the majority of respondents believe that their Social Security benefits increase with labor supply. Indeed, respondents generally report a link between labor supply and future benefits that is somewhat greater than the actual incentive. We also surveyed people about their understanding of various other provisions in the Social Security benefit rules. We find that some of these provisions (e.g., effects of delayed benefit claiming and rules on widow benefits) are relatively well understood while others (e.g., rules on spousal benefits, provisions on which years of earnings are taken into account) are less well understood. In addition, our survey incorporated a framing experiment, which shows that how the incentives for delayed claiming are presented has an impact on hypothetical claiming decisions. In particular, the traditional "break-even" framing used by the Social Security Administration leads to earlier claiming than other presentations do.
Book Synopsis Labor Supply and Social Welfare Benefits in the United States by : Robert J. Lampman
Download or read book Labor Supply and Social Welfare Benefits in the United States written by Robert J. Lampman and published by . This book was released on 1978 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt? by : Jonathan Gruber
Download or read book Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt? written by Jonathan Gruber and published by . This book was released on 2000 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Social Security earnings test, a version of which still applies to those ages 62-64, reduces immediate payments to beneficiaries whose labor income exceeds a given threshold. Although benefits are subsequently increased to compensate for any such reduction, the earnings test is typically perceived as a tax on working. As a result, it is considered by many to be an important disincentive to paid work for older Americans. Yet there is little evidence to suggest an economically significant effect of the earnings test on hours of work, and almost no research on the effect of the test on the decision to work at all. We investigate these issues using the significant changes in the structure of the earnings test over the past 25 years, using data over the past 25 years, using data over the 1973-1998 period from the March Supplement to the Current Population Survey (CPS), which provide large samples of observations on the elderly. Our analysis suggests two major conclusions. First, the earnings test exerts no robust influence on the labor supply decisions of men. Neither graphical analyses of breaks in labor supply trends, nor regression estimates that control for underlying trends in labor supply by age group, reveal any significant impact of changes in earnings test parameters on aggregate employment, hours of work, or earnings for men. For women, there is more suggestive evidence that the earnings test is affecting labor supply decisions. Second, loosening the earnings test appears to accelerate benefits receipt among the eligible population, lowering benefits levels, and heightening concerns about the standard of living of these elderly at very advanced ages. Our findings suggest some cause for caution before rushing to remove the earnings test at younger ages.
Book Synopsis Persistence in Labor Supply and the Response to the Social Security Earnings Test by : Leora Friedberg
Download or read book Persistence in Labor Supply and the Response to the Social Security Earnings Test written by Leora Friedberg and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the impact on labor supply of changes in the Social Security earnings test in 1996 and 2000. We highlight how the persistence of labor supply choices influences both responses to policy changes and the estimation of such responses. We do this in two ways. First, we use data from the Health and Retirement Study and the Current Population Survey that allows us to compare employment transitions across cohorts that are differentially affected by changes in the earnings test rules. We show that conditioning on last year's employment status is important in identifying responses to current earnings test changes. Second, we test the effect of not only current but also anticipated as well as past earnings test parameters which cohorts faced at earlier ages. We find that past and anticipated future rules influence current employment and earnings. Our results help to identify an effect of earnings test changes affecting ages 65-69 on employment at younger and older ages, which suggests caution about the use of neighboring age groups as control groups in analyzing responses to the earnings test. We also show that earnings test changes that were initiated in 1996 had an important effect, in addition to the changes in 2000 that have been extensively studied.
Book Synopsis Older Worker Earnings and the 1965 Social Security Amendments by : Wayne Vroman
Download or read book Older Worker Earnings and the 1965 Social Security Amendments written by Wayne Vroman and published by . This book was released on 1971 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Social Security, Benefit Claiming, and Labor Force Participation by : Selahattin Imrohoroglu
Download or read book Social Security, Benefit Claiming, and Labor Force Participation written by Selahattin Imrohoroglu and published by DIANE Publishing. This book was released on 2011 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a print on demand edition of a hard to find publication. A general equilibrium model of overlapping generations that incorporates endogenous saving, labor force participation, work hours, and Social Security (SS) benefit claims. Three SS reforms are studied: 1) a reduction in benefits and payroll taxes; 2) an increase in the earliest retirement age, to 64 from 62; and 3) an increase in the normal retirement age, to 68 from 66. A 50% cut in the scope of the current system significantly raises asset holdings and the labor input, through higher participation of older workers, and reduces the shortfall of the SS budget. Increasing the normal retirement age also raises saving and the labor supply, but the effects are smaller. Postponing the earliest retirement age has only a negligible effect. Charts and tables.
Book Synopsis Persistence in Labor Supply and the Response to the Social Security Earnings Test by : Leora Friedberg
Download or read book Persistence in Labor Supply and the Response to the Social Security Earnings Test written by Leora Friedberg and published by . This book was released on 2013 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the impact on labor supply of changes in the Social Security Earnings Test in 1996 and 2000. We highlight how the persistence of labor supply choices influences both responses to policy changes and the estimation of such responses. We do this in two ways. First, we use data from the Health and Retirement Study and the Current Population Survey that allows us to compare employment transitions across cohorts that are differentially affected by changes in the earnings test rules. We show that conditioning on last year's employment status is important in identifying responses to current earnings test changes. Second, we test the effect of not only current but also anticipated as well as past earnings test parameters which cohorts faced at earlier ages. We find that past and anticipated future rules influence current employment and earnings. Our results help to identify an effect of earnings test changes affecting ages 65-69 on employment at younger and older ages, which suggests caution about the use of neighboring age groups as control groups in analyzing responses to the earnings test. We also show that earnings test changes that were initiated in 1996 had an important effect, in addition to the changes in 2000 that have been extensively studied.
Book Synopsis Labor Supply Effects of Social Insurance by : Alan B. Krueger
Download or read book Labor Supply Effects of Social Insurance written by Alan B. Krueger and published by . This book was released on 2002 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: This chapter examines the labor supply effects of social insurance programs. We argue that this topic deserves separate treatment from the rest of the labor supply literature because individuals may be imperfectly informed as to the rules of the programs and because key parameters are likely to differ for those who are eligible for social insurance programs, such as the disabled. Furthermore, differences in social insurance programs often provide natural experiments with exogenous changes in wages or incomes that can be used to estimate labor supply responses. Finally, social insurance often affects different margins of labor supply. For example, the labor supply literature deals mostly with adjustments in the number of hours worked, whereas the incentives of social insurance programs frequently affect the decision of whether to work at all. The empirical work on unemployment insurance (UI) and workers' compensation (WC) insurance finds that the programs tend to increase the length of time employees spend out of work. Most of the estimates of the elasticities of lost work time that incorporate both the incidence and duration of claims are close to 1.0 for unemployment insurance and between 0.5 and 1.0 for workers' compensation. These elasticities are substantially larger than the labor supply elasticities typically found for men in studies of the effects of wages or taxes on hours of work. The evidence on disability insurance and (especially) social security retirement suggests much smaller and less conclusively established labor supply effects. Part of the explanation for this difference probably lies in the fact that UI and WC lead to short-run variation in wages with mostly a substitution effect. Our review suggest that it would be misleading to apply a universal set of labor supply elasticities to these diverse problems and populations
Book Synopsis Labor Supply Responses to Social Security by : John Laitner
Download or read book Labor Supply Responses to Social Security written by John Laitner and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economists' most basic model for studying Social Security policy issues is the so - called life - cycle model of saving behavior. This paper sets up a life - cycle model in which a household simultaneously chooses its lifetime consumption profile and retirement age. The paper calibrates parameters from Consumer Expenditure Survey data, making special use of observations of changes in household consumption immediately following retirement. The paper's last section provides illustrative simulations of the effect of current Social Security provisions on average retirement ages, finding evidence of a several year reduction in working life in some cases.
Book Synopsis Market Inefficiency and Household Labor Supply by : Itzik Fadlon
Download or read book Market Inefficiency and Household Labor Supply written by Itzik Fadlon and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the effects of the Social Security survivors benefits program on household labor supply and the efficiency implications for insurance and credit markets. We use U.S. population tax records and exploit a sharp age discontinuity in benefit eligibility for identification. We find that eligibility induces considerable reductions in labor supply both among newly-widowed households in the immediate post-shock periods and among already-widowed households whose benefit receipt is entirely predictable. The evidence points to liquidity constraints, rather than myopia, as a leading operative mechanism underlying household responses to anticipated benefits. Our findings identify important inefficiencies in the life insurance market and in the allocation of credit. Our results further highlight the protective insurance role of the social program and the importance of liquidity provided by the government, and they suggest potential gains from expanding and smoothing the program's benefit schedule.
Book Synopsis Taxes, Transfers, and Labor Supply by : Gary T. Burtless
Download or read book Taxes, Transfers, and Labor Supply written by Gary T. Burtless and published by . This book was released on 1985 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis SSI, Labor Supply, and Migration by : David Neumark
Download or read book SSI, Labor Supply, and Migration written by David Neumark and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Labor Supply Effects of the Interaction Between the Social Security Disability and Retirement Programs at Full Retirement Age by : Nicole Maestas
Download or read book Labor Supply Effects of the Interaction Between the Social Security Disability and Retirement Programs at Full Retirement Age written by Nicole Maestas and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Social Security Disability Insurance (DI) program imposes strong work restrictions on beneficiaries; however, the causal effect of the work disincentives on labor supply has been difficult to estimate. We take a new look at this question by exploiting the fact that DI benefits are payable only until full retirement age (FRA), at which point they are converted to retired worker benefits, and the program's implicit high marginal tax rate on earnings is abruptly relaxed. Using a quasi-experimental research design, we examine whether the DI work disincentives are binding by comparing changes in labor force participation rates before and after the FRA for DI beneficiaries and non-beneficiaries. We find a relative increase in labor force participation at FRA for DI beneficiaries of 10.4 percentage points, and argue that this is likely a lower bound estimate on the labor supply disincentive effects of the DI program.
Book Synopsis The Labor Supply Effects and Costs of Alternative Negative Income Tax Programs: The labor supply response function by :
Download or read book The Labor Supply Effects and Costs of Alternative Negative Income Tax Programs: The labor supply response function written by and published by . This book was released on 1977 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:
