 Social Security Benefits and Employer Behavior: Evaluating Social Security Early Retirement Benefits as a Form of Unemployment InsuranceRobert Hutchens International Economic Review, 1999, vol. 40, issue 3, 659-78 Abstract: Employers often shed older workers by encouraging them to "take" early retirement. An implicit contract model suggests that this behavior will be influenced by the social security early retirement program. When demand is weak and layoffs are necessary, social security benefits can act like a form of unemployment insurance, effectively subsidizing workforce reductions by lowering the cost to the firm of shedding older workers. Since social security benefits are not subject to experience rating, the result is an inefficiently high level of early retirements. This paper concludes with a discussion of policies for restoring early retirements to efficient levels. Copyright 1999 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association. Date: 1999 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ier:iecrev:v:40:y:1999:i:3:p:659-78 Ordering information: This journal article can be ordered from Access Statistics for this article International Economic Review is currently edited by Harold L. Cole More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC. |
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