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Removing the Disincentives for Long Careers in the Social Security and Medicare Benefit Structure


  • Gopi Shah Goda

    () (Stanofrd University)

  • John Shoven

    () (Stanford Institue for Economic Policy Research, Stanford University)

  • Sita Slavov

    (Economics Department, Occidental College)


When Social Security was instituted in 1935, the period life expectancy at age 20 for males was 66 and for females 69. Today, 20-year-old males have a period life expectancy of 76 and females, 80. This increase in life expectancy has been accompanied by a corresponding improvement in health at all ages. Cutler, Liebman, and Smyth (2005) find that, in terms of mortality, men at age 68 in 2000 have roughly the same mortality risk as men at age 62 in 1960. Thus, at a same age, men in the year 2000 are roughly six years younger. In terms of self assessed health status, they find that the difference is even larger, approximately ten years. Their bottom line is, “Our best guess is that people aged 62 in the 1960s are in equivalent health to people aged 70 or more today.” In related work, Shoven (2004) suggested that the age of elderly people is more appropriately measured by remaining life expectancy than by years since birth. In his most recent work, Shoven (2007) introduces the concept of “real ages” in contrast to “nominal ages” with real ages depending on mortality risk rather than years since birth.

Suggested Citation

  • Gopi Shah Goda & John Shoven & Sita Slavov, 2008. "Removing the Disincentives for Long Careers in the Social Security and Medicare Benefit Structure," Discussion Papers 08-058, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:08-058

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    References listed on IDEAS

    1. Gary Burtless & Joseph F. Quinn, 2002. "Is Working Longer the Answer for an Aging Workforce?," Boston College Working Papers in Economics 550, Boston College Department of Economics.
    2. Feldstein, Martin & Samwick, Andrew A., 1992. "Social Security Rules and Marginal Tax Rates," National Tax Journal, National Tax Association;National Tax Journal, vol. 45(1), pages 1-22, March.
    3. Jonathan Gruber & David Wise, 1997. "Social Security Programs and Retirement Around the World: Introduction and Summary of Papers by..," NBER Working Papers 6134, National Bureau of Economic Research, Inc.
    4. Robert Fenge & Silke Übelmesser & Martin Werding, 2002. "Second-best Properties of Implicit Social Security Taxes: Theory and Empirical Evidence," CESifo Working Paper Series 743, CESifo Group Munich.
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    Cited by:

    1. David C. Stapleton, "undated". "Employment Support for the Transition to Retirement: Can a New Program Help Older Workers Continue to Work and Protect Those Who Cannot?," Mathematica Policy Research Reports aca13fdc8ba2439486551946d, Mathematica Policy Research.
    2. repec:mpr:mprres:6248 is not listed on IDEAS

    More about this item


    Social Security; Real Age; life expectancy;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination


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