The Employment Effects of the Social Security Earnings Test

Alexander M. Gelber, Damon Jones, Daniel W. Sacks and Jae Song

No 26696, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the impact of the Social Security Annual Earnings Test (AET) on the employment decisions of older Americans. The AET reduces Social Security benefits by one dollar for every two dollars earned above the exempt amount. Using a differences-in-differences design, we find that the employment rate of those predicted to become subject to the AET decreases substantially relative to those not predicted to become subject to it. The point estimates suggest that the AET reduces the employment rate of Americans aged 63-64 by at least 1.2 percentage points.

JEL-codes: H55 J22 J26 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-age, nep-lma, nep-pbe and nep-pub
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Citations: View citations in EconPapers (8)

Published as Alexander Gelber & Damon Jones & Daniel W. Sacks & Jae Song, 2022. "The Employment Effects of the Social Security Earnings Test," Journal of Human Resources, vol 57(2), pages 341-371.

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Journal Article: The Employment Effects of the Social Security Earnings Test (2022)
Working Paper: The Employment Effects of the Social Security Earnings Test (2020)
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