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Social Security's Earnings Test Penalty and the Employment Rates of Elderly Men Aged 65 to 69

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  • Stephen Rubb

    (Department of Economics, Bentley College)

Abstract

In 1990, the rate at which Social Security reduces benefits as a result of earnings above an annually adjusted threshold of $9,360 was reduced from 50 percent to 33 percent for individuals age 65 to 69. In all twelve difference-in-differences models, the change in Social Security's earnings test penalty has a positive but statistically insignificant impact on both the employment rate and the annual hours worked of 66 to 69 year old men relative to those in valid control groups (consistent with the substitution effect).

Suggested Citation

  • Stephen Rubb, 2003. "Social Security's Earnings Test Penalty and the Employment Rates of Elderly Men Aged 65 to 69," Eastern Economic Journal, Eastern Economic Association, vol. 29(3), pages 415-431, Summer.
    • Handle: RePEc:eej:eeconj:v:29:y:2003:i:3:p:415-431
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume29/V29N3P415_431.pdf
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    References listed on IDEAS

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    1. Alan L. Gustman & Thomas L. Steinmeier, 1991. "Changing the Social Security Rules for Work after 65," ILR Review, Cornell University, ILR School, vol. 44(4), pages 733-745, July.
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    3. Reimers, Cordelia & Honig, Marjorie, 1993. "The Perceived Budget Constraint under Social Security: Evidence from Reentry Behavior," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 184-204, January.
    4. Meyer, Bruce D, 1995. "Natural and Quasi-experiments in Economics," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 151-161, April.
    5. Gruber, Jonathan & Orszag, Peter, 2003. "Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt?," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(4), pages 755-773, December.
    6. Stephen Rubb, 2002. "US Social Security rules in the 1990s: a natural experiment in myopic and farsighted behaviour," Applied Economics Letters, Taylor & Francis Journals, vol. 9(10), pages 637-640.
    7. Alan S. Blinder & Roger H. Gordon & Donald E. Wise, 1980. "Reconsidering the Work Disincentive Effects of Social Security," NBER Working Papers 0562, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Dale S. Bremmer & Randy Kesselring, 2018. "How Social Security’s Earning Test, Age and Education Affect Female Labor Supply," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(4), pages 357-377, December.

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    More about this item

    Keywords

    Elderly; Social Security;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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