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

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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)

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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.

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Publisher 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.

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Length: 90 pages
Date of creation: 01 Mar 2005
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Handle: RePEc:pen:papers:05-020

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Related research
Keywords: Social Security Retirement Savings

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Find related papers by JEL classification:
D1 - Microeconomics - - Household Behavior
J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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.:

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    Other versions:
  2. 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. [Downloadable!] (restricted)
    Other versions:
  3. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March. [Downloadable!] (restricted)
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    Other versions:
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    • Feldstein, Martin & Liebman, Jeffrey B., 2002. "Social security," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324 Elsevier. [Downloadable!] (restricted)
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    Other versions:
    • Gourieroux, C. & Monfort, A. & Renault, E., 1992. "Indirect Inference," Papers 92.279, Toulouse - GREMAQ.
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  14. 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. [Downloadable!] (restricted)
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  18. Van Der Klaauw, W., 1993. "Female Labor Supply and Marital Status Decisions: A Life Cycle Model," Working Papers 93-23, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  19. Sickles, Robin C & Taubman, Paul, 1986. "An Analysis of the Health and Retirement Status of the Elderly," Econometrica, Econometric Society, vol. 54(6), pages 1339-56, November. [Downloadable!] (restricted)
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  22. 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. [Downloadable!] (restricted)
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  24. 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. [Downloadable!] (restricted)
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  28. repec:cup:etheor:v:12:y:1996:i:4:p:657-81 is not listed on IDEAS
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  31. Keane, Michael P & Wolpin, Kenneth I, 1997. "The Career Decisions of Young Men," Journal of Political Economy, University of Chicago Press, vol. 105(3), pages 473-522, June.
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  32. Donna B. Gilleskie & David M. Blau, 2006. "Health insurance and retirement of married couples," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(7), pages 935-953. [Downloadable!]
  33. David M. Blau & Donna B. Gilleskie, 2003. "The Role of Retiree Health Insurance in the Employment Behavior of Older Men," NBER Working Papers 10100, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, 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.)

  1. Victor Aguirregabiria & Pedro mira, 2007. "Dynamic Discrete Choice Structural Models: A Survey," Working Papers tecipa-297, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  2. Gaobo Pang & University of Maryland, 2006. "Tax-Deferred Savings and Early Retirement," Computing in Economics and Finance 2006 31, Society for Computational Economics. [Downloadable!]
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