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The abolition of the earnings rule for UK pensioners

  • Richard Disney

    ()

    (Institute for Fiscal Studies and University of Nottingham)

  • Sarah Tanner

The US has legislated to abolish its social security earnings test. A priori it is not possible to predict the effect this will have on work incentives. Using data from the Family Expenditure Survey we show that the abolition of the earnings rule in the UK increased the number of hours worked by men. The lack of any evidence of a reduction in hours may be a consequence of those who previously earned more than the earnings threshold deferring pension receipt at an actuarially favourable rate. This is consistent with there being little evidence of a significant change in the number of deferrals after the earnings rule was abolished.

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File URL: http://www.ifs.org.uk/wps/wp0013.pdf
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Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W00/13.

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Length: 24 pp
Date of creation: Jun 2000
Date of revision:
Handle: RePEc:ifs:ifsewp:00/13
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