- Title
- Social Security and Retirees' Decision to Work
- Author(s)
- Mark E. Votruba Mark Votruba (Case Western Reserve University)
- Abstract
- The current paper addresses whether beneficiaries will respond to ongoing Social Security benefit reductions by increasing post-retirement labor supply. Non-linearities in the benefits formula allow one to estimate the effect of benefit size on retirees' probability of working while simultaneously controlling for inputs into the benefits formula. Consistent with economic theory, larger benefits significantly decrease the probability of work among married retirees. A 10% increase in benefit size decreases the probability of work 3-4 percentage points for recently retired husbands (from a mean of 25.5%) and 2-3 percentage points for recently retired wives (from a mean of 12.8%). For both spouses, the effect disappears in the later years of retirement, suggesting earnings are unlikely to offset benefit reductions for older retirees.
- Creation Date
- 2003-05
- Section URL ID
- IRS
- Paper Number
- 474
- URL
- https://dataspace.princeton.edu/bitstream/88435/dsp01db78tc03z/1/474.pdf
- File Function
- Jel
- H55, J14, J26, J22
- Keyword(s)
- Social Security; retirement; labor supply
- Suppress
- false
- Series
- 1