Partial Retirement and the Earnings Test
This paper studies the effects of the earnings test on retirement behavior. The earnings tests of most social security systems tax post-retirement earnings at a relatively high level and do not lead to actuarially fair increases in future benefits. This results in discouragement of partial retirement. The paper shows that a reduction in the earnings test's tax rate is likely to increase part-time work; and that in special cases the increase in work effort may even lead to a reduction in the net transfer from social security to the individual.
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- Eytan Sheshinski, 1977.
"A Model of Social Security and Retirement Decisions,"
NBER Working Papers
0187, National Bureau of Economic Research, Inc.
- Sheshinski, Eytan, 1978. "A model of social security and retirement decisions," Journal of Public Economics, Elsevier, vol. 10(3), pages 337-360, December.
- Diamond, P. A. & Hausman, J. A., 1984. "Individual retirement and savings behavior," Journal of Public Economics, Elsevier, vol. 23(1-2), pages 81-114.
- Vincent P. Crawford & David M. Lilien, 1981. "Social Security and the Retirement Decision," The Quarterly Journal of Economics, Oxford University Press, vol. 96(3), pages 505-529.
- Gustman, Alan L & Steinmeier, Thomas L, 1986.
"A Structural Retirement Model,"
Econometric Society, vol. 54(3), pages 555-584, May.
- Honig, Marjorie & Reimers, Cordelia, 1989. "Is It Worth Eliminating the Retirement Test?," American Economic Review, American Economic Association, vol. 79(2), pages 103-107, May.
- Burtless, Gary & Moffitt, Robert A, 1985. "The Joint Choice of Retirement Age and Postretirement Hours of Work," Journal of Labor Economics, University of Chicago Press, vol. 3(2), pages 209-236, April.
- Zabalza, A. & Pissarides, C. & Barton, M., 1980.
"Social security and the choice between full-time work, part-time work and retirement,"
Journal of Public Economics,
Elsevier, vol. 14(2), pages 245-276, October.
- A. Zabalza & C. Pissarides & M. Barton, 1980. "Social security and the choice between full-time work, part-time work and retirement," NBER Chapters, in: Econometric Studies in Public Finance, pages 245-276 National Bureau of Economic Research, Inc.
- Gary Burtless & Robert A. Moffitt, 1986. "Social Security, Earnings Tests, and Age at Retirement," Public Finance Review, SAGE Publishing, vol. 14(1), pages 3-27, January.
- John B. Burbidge & A. Leslie Robb, 1980. "Pensions and Retirement Behaviour," Canadian Journal of Economics, Canadian Economics Association, vol. 13(3), pages 421-437, August.
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