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The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation

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Author Info
Krueger, Alan B
Pischke, Jorn-Steffen

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Abstract

This article uses aggregate birth year/calendar year level data derived from the Current Population Survey to estimate the effect of Social Security wealth on the labor supply of older men in the 1970s and 1980s. The analysis focuses on measuring the impact of the 1977 amendments to the Social Security Act, which created a substantial, unanticipated reduction in Social Security wealth for individuals born after 1916. This differential in benefits has become known as the benefit notch. Results indicate that labor supply continued to decline for the "notch babies" who received lower Social Security benefits than earlier cohorts. Copyright 1992 by University of Chicago Press.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 10 (1992)
Issue (Month): 4 (October)
Pages: 412-37
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Handle: RePEc:ucp:jlabec:v:10:y:1992:i:4:p:412-37

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  1. Kathryn Anderson & Richard V. Burkhauser & Joseph F. Quinn, 1986. "Do retirement dreams come true? The effect of unanticipated events on retirement plans," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(4), pages 518-526, July.
  2. Kahn, James A., 1988. "Social security, liquidity, and early retirement," Journal of Public Economics, Elsevier, vol. 35(1), pages 97-117, February. [Downloadable!] (restricted)
  3. B. Douglas Bernheim, 1987. "Social Security Benefits: An Empirical Study of Expectations and Realizations," NBER Working Papers 2257, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914.
  5. Boskin, Michael J, 1977. "Social Security and Retirement Decisions," Economic Inquiry, Oxford University Press, vol. 15(1), pages 1-25, January.
  6. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126. [Downloadable!] (restricted)
  7. John Bound, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," NBER Working Papers 2816, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Pellechio, Anthony J, 1979. "Social Security Financing and Retirement Behavior," American Economic Review, American Economic Association, vol. 69(2), pages 284-87, May.
  9. Hanoch, Giora & Honig, Marjorie, 1978. "The labor supply curve under income maintenance programs," Journal of Public Economics, Elsevier, vol. 9(1), pages 1-16, February. [Downloadable!] (restricted)
  10. Anthony J. Pellechio, 1981. "Social Security and the Decision to Retire," NBER Working Papers 0734, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Michael D. Hurd & Michael J. Boskin, 1985. "The Effect of Social Security on Retirement in the Early 1970s," NBER Working Papers 0659, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Alan S. Blinder & Roger H. Gordon & Donald E. Wise, 1981. "Reconsidering the Work Disincentive Effects of Social Security," NBER Working Papers 0562, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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