IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Social Security, Endogenous Retirement, and Intrahousehold Cooperation

  • Laura Turner

    (University of Toronto)

  • Giovanni Gallipoli

    (University of British Columbia)

This paper studies the retirement incentives generated by the U.S. Social Security system in a framework which allows for different degrees of cooperation and strategic interaction between spouses. We examine the relative empirical performance of models specified under different assumptions about spouses' preferences (specifically over complementarities in leisure during retirement) and commitment to a jointly optimal retirement path. We assess the models' relative ability to replicate a large set of economic choices observed at or around the time of retirement. These choices include the tendency of individuals to retire close to the first availability of regular Social Security retirement benefits; for spouses to retire approximately at the same time; and for transitions into retirement to be made either through "bridge jobs" -- exit from a full-time career job several years before full retirement -- or through application for Social Security disability benefits. Our results suggest a role for non-cooperative behavior in households in which main-earners are subject to large transfer liabilities towards second-earners, which effectively introduce a `tax wedge' on earned income and affect both labor supply and retirement decisions. The different models also suggest different welfare implications for current Social Security policy in partial equilibrium, with the utility value of most features of the current system increasing with spousal complementarity in leisure, but decreasing in the degree non-cooperation between household members approaching retirement.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: https://www.economicdynamics.org/meetpapers/2011/paper_935.pdf
Download Restriction: no

Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 935.

as
in new window

Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:red:sed011:935
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  2. Michael Baker & Gary Solon, 1999. "Earnings Dynamics and Inequality among Canadian Men, 1976-1992: Evidence from Longitudinal Income Tax Records," NBER Working Papers 7370, National Bureau of Economic Research, Inc.
  3. Wooldridge, Jeffrey M., 1995. "Selection corrections for panel data models under conditional mean independence assumptions," Journal of Econometrics, Elsevier, vol. 68(1), pages 115-132, July.
  4. Au, Doreen & Crossley, Thomas F. & Schellhorn, Martin, 2004. "The Effect of Health Changes and Long-Term Health on the Work Activity of Older Canadians," IZA Discussion Papers 1281, Institute for the Study of Labor (IZA).
  5. Shintaro Yamaguchi & Claudia Ruiz & Maurizio Mazzocco, 2014. "Labor Supply, Wealth Dynamics and Marriage Decisions," 2014 Meeting Papers 210, Society for Economic Dynamics.
  6. Maurizio Mazzocco, 2004. "Saving, Risk Sharing, and Preferences for Risk," American Economic Review, American Economic Association, vol. 94(4), pages 1169-1182, September.
  7. Mark Huggett & Gustavo Ventura, 1998. "On the Distributional Effects of Social Security Reform," Working Papers 9801, Centro de Investigacion Economica, ITAM.
  8. David Levine, 1981. "A Remark on Serial Correlation in Maximum Likelihood," UCLA Economics Working Papers 215, UCLA Department of Economics.
  9. Kreider, Brent, 1999. "Social Security Disability Insurance: Applications, Awards, and Lifetime Income Flows," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 784-827, October.
  10. Campolieti, Michele, 2002. "Disability and the labor force participation of older men in Canada," Labour Economics, Elsevier, vol. 9(3), pages 405-432, July.
  11. David Domeij & Martin Floden, 2006. "The Labor-Supply Elasticity and Borrowing Constraints: Why Estimates are Biased," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(2), pages 242-262, April.
  12. Ayşe İmrohoroğlu & Selahattin İmrohoroğlu & Douglas H. Joines, 2003. "Time-Inconsistent Preferences and Social Security," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 745-784.
  13. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers wp009, University of Michigan, Michigan Retirement Research Center.
  14. Lundberg, S. & Pollak, R.A., 1991. "Separate Spheres Bargaining and the Marriage Market," Working Papers 91-08, University of Washington, Department of Economics.
  15. Alan L. Gustman & Thomas L. Steinmeier, 2002. "The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth," Working Papers wp029, University of Michigan, Michigan Retirement Research Center.
  16. Jiménez-Martín, Sergi & Labeaga, José M. & Martínez Granado, Maite, 1999. "Health status and retirement decisions for older European couples," IRISS Working Paper Series 1999-01, IRISS at CEPS/INSTEAD.
  17. Courtney Coile & Jonathan Gruber, 2001. "Social Security Incentives for Retirement," NBER Chapters, in: Themes in the Economics of Aging, pages 311-354 National Bureau of Economic Research, Inc.
  18. Alan L. Gustman & Thomas L. Steinmeier, 2004. "Personal Accounts and Family Retirement," NBER Working Papers 10305, National Bureau of Economic Research, Inc.
  19. David H. Autor & Mark G. Duggan, 2006. "The Growth in the Social Security Disability Rolls: A Fiscal Crisis Unfolding," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 71-96, Summer.
  20. Richard V. Burkhauser & J. S. Butler & Gulcin Gumus, 2004. "Dynamic programming model estimates of Social Security Disability Insurance application timing," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 671-685.
  21. Kevin E. Cahill & Michael D. Giandrea & Joseph F. Quinn, 2005. "Are Traditional Retirements a Thing of the Past? New Evidence on Retirement Patterns and Bridge Jobs," Boston College Working Papers in Economics 626, Boston College Department of Economics.
  22. John Bound & Julie Berry Cullen & Austin Nichols & Lucie Schmidt, 2002. "The Welfare Implications of Increasing Disability Insurance Benefit Generosity," NBER Working Papers 9155, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:red:sed011:935. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.