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The Effect of the Social Security Earnings Test on Male Labor Supply: New Evidence from Survey and Administrative Data

  • Steven J. Haider
  • David S. Loughran

Despite numerous empirical studies, there is surprisingly little agreement about whether the Social Security earnings test affects male labor supply. In this paper, we provide a comprehensive analysis of the labor supply effects of the earnings test using longitudinal administrative earnings data and more commonly used survey data. We find that the response to the earnings test in survey data is obfuscated by measurement error and labor market rigidities. Accounting for these factors, our results suggest a consistent and substantial response to the earnings test, especially for younger men.

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File URL: http://jhr.uwpress.org/cgi/reprint/43/1/57
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 43 (2008)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:43:y:2008:i:1:p57-87
Contact details of provider: Web page: http://jhr.uwpress.org/

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  1. repec:att:wimass:9430 is not listed on IDEAS
  2. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January.
  3. Burkhauser, Richard V & Turner, John A, 1978. "A Time-Series Analysis on Social Security and Its Effect on the Market Work of Men at Younger Ages," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 701-15, August.
  4. John Bound & Alan B. Krueger, 1989. "The Extent of Measurement Error In Longitudinal Earnings Data: Do Two Wrongs Make A Right?," NBER Working Papers 2885, National Bureau of Economic Research, Inc.
  5. John Rust & Christopher Phelan, 1994. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Public Economics 9406005, EconWPA, revised 06 Jul 1994.
  6. Reimers, Cordelia & Honig, Marjorie, 1993. "The Perceived Budget Constraint under Social Security: Evidence from Reentry Behavior," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 184-204, January.
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