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How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets

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Author Info

  • Rust, J.

Abstract

This paper provides an empirical analysis of how the U.S. Social Security and Medicare system affects the labor supply of older males in the presence of incomplete markets. The authors estimate a dynamic programming model of the joint labor supply and Social Security acceptance decision. The model is able to account for a wide variety of phenomena observed in the data, including the pronounced peaks in the distribution of retirement ages at sixty-two and sixty-five. Overall, the authors' model suggests that several puzzling aspects of retirement behavior can be viewed as artifacts of particular details of the Social Security rules.

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Bibliographic Info

Paper provided by Wisconsin Madison - Social Systems in its series Working papers with number 9430.

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Length: 74 pages
Date of creation: 1994
Date of revision:
Handle: RePEc:att:wimass:9430

Contact details of provider:
Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.

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Keywords: social security ; retirement;

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References

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  14. MaCurdy, Thomas E, 1983. "A Simple Scheme for Estimating an Intertemporal Model of Labor Supply and Consumption in the Presence of Taxes and Uncertainty," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(2), pages 265-89, June.
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  30. repec:att:wimass:9106 is not listed on IDEAS
  31. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
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