Social Security, Labor Supply and Health of Older Workers: Quasi-Experimental Evidence from a Large Reform

Itay Saporta-Eksten, Ity Shurtz and Sarit Weisburd
Authors registered in the RePEc Author Service: Itay Saporta Eksten

No 14769, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the effects of public pension systems on the retirement timing of older workers and, in turn, the health consequences of delaying retirement by those workers. Causal inference relies on a social security reform in Israel that shifted payments from husbands to their (non-working) wives, thereby substantially reducing the implied tax on the husband’s employment while keeping overall household wealth constant. Using administrative social security data, we estimate extensive-margin labor supply elasticities w.r.t. the average net-of-tax rate of about 0.43 for men over 65. Using the reform to instrument for employment, we find that working an additional full year at old age decreases longevity. This mortality effect occurs after age 75 and is driven by workers holding blue-collar jobs. Finally, we evaluate the effect of the reform on earnings. The results imply a small value for an additional year of life, suggesting that workers underestimate the health cost of employment at older ages.

Keywords: Labor supply; Social security; Tax reform; Health; Mortality (search for similar items in EconPapers)
JEL-codes: H31 J10 J22 J26 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-age, nep-hea, nep-lab and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP14769 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Social Security, Labor Supply, and Health of Older Workers: Quasi-Experimental Evidence from a Large Reform (2021)
Working Paper: Social Security, Labor Supply and Health of Older Workers: Quasi-Experimental Evidence from a Large Reform (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14769

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP14769

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().