The joint labor supply decision of married couples and the U.S. Social Security pension system

Shinichi Nishiyama ()

Review of Economic Dynamics, 2019, vol. 31, 277-304

Abstract: The current U.S. Social Security program redistributes resources from high-wage workers to low-wage workers through its progressive benefits schedule and from two-earner married couples and single workers to one-earner married couples through the program's spousal and survivors benefits. This paper extends a standard general-equilibrium overlapping-generations model with uninsurable wage shocks to analyze the effect of spousal and survivors benefits on the labor supply of married households and the overall economy. The heterogeneous-agent model calibrated to the U.S. economy predicts that removing spousal and survivors benefits would increase the female labor participation rate by 1.5–1.6%, women's total work hours by 1.7–1.8%, and the total output of the economy by 0.5–0.6% in the long run. A phased-in cohort-by-cohort removal of these benefits would make all age cohorts, on average, better off under the balanced-budget assumption, although the policy change would make the majority of young married households worse off in the short run. (Copyright: Elsevier)

Keywords: Dynamic general equilibrium; Heterogeneous agents; Overlapping generations; Female labor supply (search for similar items in EconPapers)
JEL-codes: D15 E62 H55 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (22)

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Software Item: Code and data files for "The Joint Labor Supply Decision of Married Couples and the U.S. Social Security Pension System" (2018)
Working Paper: The Joint Labor Supply Decision of Married Couples and the Social Security Pension System (2015)
Working Paper: The Joint Labor Supply Decision of Married Couples and the Social Security Pension System (2011)
Working Paper: The Joint Labor Supply Decision of Married Couples and the Social Security Pension System (2010)
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DOI: 10.1016/j.red.2018.08.001

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