Social Security and Retirees' Decision to Work

Mark Votruba
Additional contact information
Mark Votruba: Case Western Reserve University

No 853, Working Papers from Princeton University, Department of Economics, Industrial Relations Section.

Abstract: The current paper addresses whether beneficiaries will respond to ongoing Social Security benefit reductions by increasing post-retirement labor supply. Non-linearities in the benefits formula allow one to estimate the effect of benefit size on retirees' probability of working while simultaneously controlling for inputs into the benefits formula. Consistent with economic theory, larger benefits significantly decrease the probability of work among married retirees. A 10% increase in benefit size decreases the probability of work 3-4 percentage points for recently retired husbands (from a mean of 25.5%) and 2-3 percentage points for recently retired wives (from a mean of 12.8%). For both spouses, the effect disappears in the later years of retirement, suggesting earnings are unlikely to offset benefit reductions for older retirees.

Keywords: Social Security; retirement; labor supply (search for similar items in EconPapers)
JEL-codes: H55 J14 J22 J26 (search for similar items in EconPapers)
Date: 2003-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
https://dataspace.princeton.edu/bitstream/88435/dsp01db78tc03z/1/474.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pri:indrel:474

Access Statistics for this paper

More papers in Working Papers from Princeton University, Department of Economics, Industrial Relations Section. Contact information at EDIRC.
Bibliographic data for series maintained by Bobray Bordelon ().