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Salience and Social Security Benefits

Author

Listed:
  • Brinch, Christian N.

    () (BI Norwegian School of Business)

  • Hernæs, Erik

    () (The Ragnar Frisch Centre for Economic Research)

  • Jia, Zhiyang

    () (Statistics Norway)

Abstract

We study the effect of salience in the social security benefit system on labor earnings by exploiting kinks and notches in budget lines introduced by earnings testing and social security accrual mechanisms for 67-69 year old workers in Norway. An earnings test had large effects on labor earnings, while an accrual system discontinuity had no discernible effects. We interpret the difference as likely to be caused by a lack of salience in the accrual incentives: agents are not able or willing to take into account the value of future benefit increases when considering the relevant rewards to working.

Suggested Citation

  • Brinch, Christian N. & Hernæs, Erik & Jia, Zhiyang, 2015. "Salience and Social Security Benefits," Memorandum 13/2015, Oslo University, Department of Economics.
  • Handle: RePEc:hhs:osloec:2015_013
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dennis Fredriksen & Christian N. Brinch & Ola L. Vestad, 2017. "Life expectancy and claiming behavior in a flexible pension system," Discussion Papers 859, Statistics Norway, Research Department.
    2. repec:eee:jeeman:v:93:y:2019:i:c:p:208-220 is not listed on IDEAS
    3. Nicole Bosch, 2019. "The Incidence of Pension Contributions," CPB Discussion Paper 388, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Dur, Robert & Vollaard, Ben, 2019. "Salience of law enforcement: A field experiment," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 208-220.
    5. Vollaard, Ben, 2017. "Temporal displacement of environmental crime: Evidence from marine oil pollution," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 168-180.

    More about this item

    Keywords

    labor supply; retirement earnings test; social security wealth; difference-in-differences;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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