Partial Retirement and the Earnings Test
AbstractThis 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.
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Bibliographic InfoPaper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt1gq8c1t2.
Date of creation: 01 Nov 1992
Date of revision:
Zweimuller; retirement; earning test;
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