Advanced Search
MyIDEAS: Login to save this paper or follow this series

Social Security and the Retirement and Savings Behavior of Low Income Households

Contents:

Author Info

  • Wilbert van der Klaauw

    ()
    (Department of Economics, University of North Carolina at Chapel Hill)

  • Kenneth I. Wolpin

    ()
    (Department of Economics, University of Pennsylvania)

Abstract

In this paper, we develop and estimate a model of retirement and savings incorporating limited borrowing, stochastic wage offers, health status and survival, social security benefits, Medicare and employer provided health insurance coverage, and intentional bequests. The model is estimated on sample of relatively poor households from the first three waves of the Health and Retirement Study (HRS), for whom we would expect social security income to be of particular importance. The estimated model is used to simulate the responses to several counterfactual experiments corresponding to changes in social security rules. These include changes in benefit levels, in the payroll tax, in the social security earnings tax and in early and normal retirement ages.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://economics.sas.upenn.edu/system/files/working-papers/05-020.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 05-020.

as in new window
Length: 90 pages
Date of creation: 01 Mar 2005
Date of revision:
Handle: RePEc:pen:papers:05-020

Contact details of provider:
Postal: 3718 Locust Walk, Philadelphia, PA 19104
Phone: 215-898-9992
Fax: 215-573-2378
Email:
Web page: http://economics.sas.upenn.edu/pier
More information through EDIRC

Related research

Keywords: Social Security; Retirement; Savings;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Duggan, Mark & Singleton, Perry & Song, Jae, 2007. "Aching to retire? The rise in the full retirement age and its impact on the social security disability rolls," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1327-1350, August.
  2. Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, Econometric Society, vol. 73(2), pages 571-627, 03.
  3. Glenn R. Hubbard & Jonathan Skinner & Stephen P. Zeldes, . "Precautionary Saving and Social Insurance," Rodney L. White Center for Financial Research Working Papers, Wharton School Rodney L. White Center for Financial Research 03-95, Wharton School Rodney L. White Center for Financial Research.
  4. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(3), pages 473-522, June.
  5. Diamond, P. A. & Hausman, J. A., 1984. "Individual retirement and savings behavior," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 81-114.
  6. COILE, Courtney & DIAMOND, Peter & GRUBER, Jonathan & JOUSTEN, Alain, 2000. "Delays in claiming social security benefits," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2000029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, Econometric Society, vol. 59(1), pages 189-210, January.
  8. Alan L. Gustman & Thomas L. Steinmeier, 1983. "A Structural Retirement Model," NBER Working Papers 1237, National Bureau of Economic Research, Inc.
  9. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1992. "Pension Plan Provisions and Retirement: Men & Women, Medicare, and Models," NBER Working Papers 4201, National Bureau of Economic Research, Inc.
  10. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1267-1303.
  11. Eric French, 2005. "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour," Review of Economic Studies, Oxford University Press, vol. 72(2), pages 395-427.
  12. van der Klaauw, Wilbert & Wolpin, Kenneth I., 2008. "Social security and the retirement and savings behavior of low-income households," Journal of Econometrics, Elsevier, Elsevier, vol. 145(1-2), pages 21-42, July.
  13. Jeff Dominitz & Charles F. Manski & Jordan Heinz, 2003. ""Will Social Security Be There For You?": How Americans Perceive Their Benefits," NBER Working Papers 9798, National Bureau of Economic Research, Inc.
  14. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
  15. Alan L. Gustman & Thomas L. Steinmeier, 1994. "Employer-provided health insurance and retirement behavior," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(1), pages 124-140, October.
  16. Honig, Marjorie, 1998. "Married Women's Retirement Expectations: Do Pensions and Social Security Matter?," American Economic Review, American Economic Association, vol. 88(2), pages 202-06, May.
  17. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, Econometric Society, vol. 65(4), pages 781-832, July.
  18. John Bound & Todd Stinebrickner & Timothy Waidman, 2004. "Using a Structural Retirement Model to Simulate the Effect of Changes to the OASDI and Medicare Programs," Working Papers, University of Michigan, Michigan Retirement Research Center wp091, University of Michigan, Michigan Retirement Research Center.
  19. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1995. "Why are Retirement Rates So High at Age 65?," NBER Working Papers 5190, National Bureau of Economic Research, Inc.
  20. Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," NBER Working Papers 9183, National Bureau of Economic Research, Inc.
  21. H. Benitez-Silva & F. Heiland, 2008. "Early claiming of social security benefits and labour supply behaviour of older Americans," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 40(23), pages 2969-2985.
  22. Keane, Michael P & Wolpin, Kenneth I, 1994. "The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 648-72, November.
  23. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
  24. Bernheim, B Douglas & Levin, Lawrence, 1989. "Social Security and Personal Saving: An Analysis of Expectations," American Economic Review, American Economic Association, vol. 79(2), pages 97-102, May.
  25. Keane, Michael P & Wolpin, Kenneth I, 2000. "Eliminating Race Differences in School Attainment and Labor Market Success," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 18(4), pages 614-52, October.
  26. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1994. "Pension Plan Provisions and Retirement: Men and Women, Medicare, and Models," NBER Chapters, in: Studies in the Economics of Aging, pages 183-222 National Bureau of Economic Research, Inc.
  27. Donna B. Gilleskie, 1998. "A Dynamic Stochastic Model of Medical Care Use and Work Absence," Econometrica, Econometric Society, Econometric Society, vol. 66(1), pages 1-46, January.
  28. Zvi Eckstein & Kenneth I. Wolpin, 1999. "Why Youths Drop Out of High School: The Impact of Preferences, Opportunities, and Abilities," Econometrica, Econometric Society, Econometric Society, vol. 67(6), pages 1295-1340, November.
  29. David M. Blau & Donna B. Gilleskie, 2008. "The Role Of Retiree Health Insurance In The Employment Behavior Of Older Men," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 475-514, 05.
  30. James H. Stock & David A. Wise, 1988. "Pensions, The Option Value of Work, and Retirement," NBER Working Papers 2686, National Bureau of Economic Research, Inc.
  31. Gourieroux, C & Monfort, A & Renault, E, 1993. "Indirect Inference," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 8(S), pages S85-118, Suppl. De.
  32. Michael D. Hurd & Kathleen McGarry, 2002. "The Predictive Validity of Subjective Probabilities of Survival," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(482), pages 966-985, October.
  33. repec:cup:etheor:v:12:y:1996:i:4:p:657-81 is not listed on IDEAS
  34. Blau, David M, 1994. "Labor Force Dynamics of Older Men," Econometrica, Econometric Society, Econometric Society, vol. 62(1), pages 117-56, January.
  35. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, Econometric Society, vol. 52(2), pages 271-320, March.
  36. David M, Blau & Donna B, Gilleskie, 2003. "Health Insurance and Retirement of Married Couples," Working Papers, Centre de Recherche en Economie et Statistique 2003-41, Centre de Recherche en Economie et Statistique.
  37. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1990. "Three Models of Retirement: Computational Complexity Versus Predictive Validity," NBER Working Papers 3558, National Bureau of Economic Research, Inc.
  38. Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, Elsevier, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier.
  39. Sickles, Robin C & Taubman, Paul, 1986. "An Analysis of the Health and Retirement Status of the Elderly," Econometrica, Econometric Society, Econometric Society, vol. 54(6), pages 1339-56, November.
  40. Tauchen, George E. & Gallant, A. Ronald, 1995. "Which Moments to Match," Working Papers, Duke University, Department of Economics 95-20, Duke University, Department of Economics.
  41. Gary S. Fields & Olivia S. Mitchell, 1984. "Retirement, Pensions, and Social Security," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262060914, December.
  42. Wolpin, Kenneth I, 1984. "An Estimable Dynamic Stochastic Model of Fertility and Child Mortality," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(5), pages 852-74, October.
  43. Manski, Charles F, 1999. "Analysis of Choice Expectations in Incomplete Scenarios," Journal of Risk and Uncertainty, Springer, Springer, vol. 19(1-3), pages 49-66, December.
  44. Tim Barmby & Nina Smith, 2001. "Household labour supply in Britain and Denmark: some interpretations using a model of Pareto Optimal behaviour," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 33(9), pages 1109-1116.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pen:papers:05-020. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dolly Guarini).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.