Partial Retirement and the Earnings Test

Josef Zweimüller (josef.zweimueller@econ.uzh.ch)

Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley

Abstract: This paper studies the effects of the earnings test on retirement behavior. The earnings tests of most social security systems tax post-retirement earnings at a relatively high level and do not lead to actuarially fair increases in future benefits. This results in discouragement of partial retirement. The paper shows that a reduction in the earnings test's tax rate is likely to increase part-time work; and that in special cases the increase in work effort may even lead to a reduction in the net transfer from social security to the individual.

Keywords: Zweimuller; retirement; earning test (search for similar items in EconPapers)
Date: 1992-11-01
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Journal Article: Partial retirement and the earnings test (1993)
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