IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v67y2014i2p443-458.html
   My bibliography  Save this article

Taxes and the Labor Supply of Older Americans: Recent Evidence From the Social Security Earnings Test

Author

Listed:
  • Gary V. Engelhardt
  • Anil Kumar

Abstract

This paper summarizes recent work on the impact of taxation on the labor supply of older individuals, with a focus on the Senior Citizens Freedom to Work Act of 2000, which abolished the Social Security earnings test for those ages 65 to 69. For men age 65 to 69, the repeal increased earnings by 8 to 20 percent and hours by 5 to 16 percent. For women claiming Social Security benefts on their own earnings history, the repeal increased earnings by 20 percent. Estimates of the compensated elasticity of earnings with respect to the net-of-tax share range from 0.05 to 0.12. Labor supply is very inelastic, even accounting for adjustment costs.

Suggested Citation

  • Gary V. Engelhardt & Anil Kumar, 2014. "Taxes and the Labor Supply of Older Americans: Recent Evidence From the Social Security Earnings Test," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(2), pages 443-458, June.
  • Handle: RePEc:ntj:journl:v:67:y:2014:i:2:p:443-458
    as

    Download full text from publisher

    File URL: https://www.ntanet.org/NTJ/67/2/ntj-v67n02p443-458-taxes-labor-supply-older-americans.pdf
    Download Restriction: Access to most recent volumes (current and past two years) is restricted to subscribers and members of the National Tax Association.

    File URL: https://www.ntanet.org/NTJ/67/2/ntj-v67n02p443-458-taxes-labor-supply-older-americans.html
    Download Restriction: Access to most recent volumes (current and past two years) is restricted to subscribers and members of the National Tax Association.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Engelhardt, Gary V. & Kumar, Anil, 2009. "The repeal of the retirement earnings test and the labor supply of older men," Journal of Pension Economics and Finance, Cambridge University Press, vol. 8(04), pages 429-450, October.
    2. Raj Chetty & John N. Friedman & Tore Olsen & Luigi Pistaferri, 2011. "Adjustment Costs, Firm Responses, and Micro vs. Macro Labor Supply Elasticities: Evidence from Danish Tax Records," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 749-804.
    3. Francine D. Blau & Lawrence M. Kahn, 2007. "Changes in the Labor Supply Behavior of Married Women: 1980–2000," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 393-438.
    4. Raj Chetty, 2012. "Bounds on Elasticities With Optimization Frictions: A Synthesis of Micro and Macro Evidence on Labor Supply," Econometrica, Econometric Society, vol. 80(3), pages 969-1018, May.
    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


    Cited by:

    1. Alexander M. Gelber & Damon Jones & Daniel W. Sacks, 2013. "Earnings Adjustment Frictions: Evidence From Social Security Earnings Test," Working Papers 13-50, Center for Economic Studies, U.S. Census Bureau.
    2. Damon Jones & Alexander M. Gelber & Daniel W. Sacks & Jae Song, 2017. "Using Kinked Budget Sets to Estimate Extensive Margin Responses: Method and Evidence from the Social Security Earnings Test," Working Papers 2017-034, Human Capital and Economic Opportunity Working Group.
    3. repec:anr:reveco:v:9:y:2017:p:383-409 is not listed on IDEAS
    4. Eric French & John Bailey Jones, 2017. "Health, Health Insurance, and Retirement: A Survey," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 383-409, September.
    5. repec:eee:pubeco:v:152:y:2017:i:c:p:102-118 is not listed on IDEAS
    6. Jones, John Bailey & Li, Yue, 2018. "The effects of collecting income taxes on Social Security benefits," Journal of Public Economics, Elsevier, vol. 159(C), pages 128-145.
    7. Alexander M. Gelber & Damon Jones & Daniel W. Sacks & Jae Song, 2017. "Using Non-Linear Budget Sets to Estimate Extensive Margin Responses: Method and Evidence from the Social Security Earnings Test," NBER Working Papers 23362, National Bureau of Economic Research, Inc.
    8. repec:eee:regeco:v:73:y:2018:i:c:p:180-195 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:67:y:2014:i:2:p:443-458. 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: (Sally Sztrecska). General contact details of provider: https://www.ntanet.org/ .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.