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The Evolution of Retirement Incentives in the US

In: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives


  • Courtney C. Coile


Employment rates of older men and women in the U.S. have been rising for the past several decades. Over the same period, there have been significant changes in Social Security and private pensions, which may have contributed to this trend. In this study, we examine how the financial incentive to work at older ages has evolved since 1980 as a result of changes in Social Security and private pensions. We find that the implicit tax on work after age 65 has dropped by about 15 percentage points for a typical worker as a result of Social Security reforms; incorporating the change in private pensions, the decline is larger. We provide suggestive evidence that the evolution of retirement incentives has affected retirement behavior.
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Suggested Citation

  • Courtney C. Coile, 2018. "The Evolution of Retirement Incentives in the US," NBER Chapters, in: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives, pages 435-459, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:14202

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    References listed on IDEAS

    1. Goldin, Claudia & Katz, Lawrence F. (ed.), 2018. "Women Working Longer," National Bureau of Economic Research Books, University of Chicago Press, number 9780226532509, November.
    2. Olivia S. Mitchell, "undated". "New Trends in Pension Benefit and Retirement Provisions," Pension Research Council Working Papers 2000-1, Wharton School Pension Research Council, University of Pennsylvania.
    3. Jeffrey B. Liebman & Erzo F. P. Luttmer, 2012. "The Perception of Social Security Incentives for Labor Supply and Retirement: The Median Voter Knows More Than You'd Think," Tax Policy and the Economy, University of Chicago Press, vol. 26(1), pages 1-42.
    4. Tammy Schirle, 2008. "Why Have the Labor Force Participation Rates of Older Men Increased since the Mid-1990s?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 549-594, October.
    5. Claudia Goldin & Lawrence F. Katz, 2018. "Women Working Longer: Increased Employment at Older Ages," NBER Books, National Bureau of Economic Research, Inc, number gold-12, July.
    6. Courtney Coile, 2018. "Working Longer in the U.S.: Trends and Explanations," NBER Working Papers 24576, National Bureau of Economic Research, Inc.
    7. Courtney C. Coile, 2018. "Working Longer in the United States: Trends and Explanations," NBER Chapters, in: Social Security Programs and Retirement around the World: Working Longer, pages 299-324, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Lanza Queiroz, Bernardo & Lobo Alves Ferreira, Matheus, 2021. "The evolution of labor force participation and the expected length of retirement in Brazil," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    2. Ben Brewer & Karen Smith Conway & Jonathan C. Rork, 2022. "Do income tax breaks for the elderly affect economic growth?," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 7-27, January.

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    More about this item

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies


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