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Reconsidering the Work Disincentive Effects of Social Security

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Author Info
Alan S. Blinder
Roger H. Gordon
Donald E. Wise

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Abstract

This paper shows that, contrary to commonly held views, the provisions of the social security law actually provide strong work incentives for older men. The reason is that, for most workers, higher current earnings lead to higher future social security benefits. These incentives have been particularly strong for workers under 65 years of age and, although they will be reduced somewhat when the 1977 amendments to the social security law become fully effective, they will remain substantial. The findings raise serious questions about recent econometric work attributing the decline in labor force participation rates of older men to the social security system.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0562.

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Date of creation: Jun 1981
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Handle: RePEc:nbr:nberwo:0562

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This page was last updated on 2009-11-25.

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