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Social Security And Retirees’ Decision To Work

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  • Mark E. Votruba

    (Case Western Reserve University)

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    Abstract

    Non-linearities in the Social Security benefits formula are used to estimate the effect of benefit size on the probability married beneficiaries work after initiating benefits. Consistent with economic theory, benefit size has a significant, negative effect on the probability of post-retirement work. A 10% increase in benefit size decreases the probability of work 3-4 percentage points for recently retired husbands (from a mean of 25.5%) and 2-3 percentage points for recently retired wives (from a mean of 12.8%). For both spouses, the effect erodes in later years of retirement.

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    File URL: http://www.princeton.edu/ceps/workingpapers/95votruba.pdf
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    Bibliographic Info

    Paper provided by Princeton University, Department of Economics, Center for Economic Policy Studies. in its series Working Papers with number 107.

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    Date of creation: Nov 2003
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    Handle: RePEc:pri:cepsud:95votruba

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    Keywords: Social Security; retirement; labor supply;

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    14. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-26, Sept./Oct.
    15. Wilbert van der Klaauw, 2002. "Estimating the Effect of Financial Aid Offers on College Enrollment: A Regression-Discontinuity Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1249-1287, November.
    16. 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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