Salience and Social Security Benefits

Christian Brinch, Erik Hernaes () and Zhiyang Jia

No 13/2015, Memorandum from Oslo University, Department of Economics

Abstract: We study the effect of salience in the social security benefit system on labor earnings by exploiting kinks and notches in budget lines introduced by earnings testing and social security accrual mechanisms for 67-69 year old workers in Norway. An earnings test had large effects on labor earnings, while an accrual system discontinuity had no discernible effects. We interpret the difference as likely to be caused by a lack of salience in the accrual incentives: agents are not able or willing to take into account the value of future benefit increases when considering the relevant rewards to working.

Keywords: labor supply; retirement earnings test; social security wealth; difference-in-differences (search for similar items in EconPapers)
JEL-codes: H55 J14 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-07-01
New Economics Papers: this item is included in nep-age
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Citations: View citations in EconPapers (2)

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Journal Article: Salience and Social Security Benefits (2017)
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