Working Paper: NBER ID: w1322
Authors: Edward P. Lazear
Abstract: Recent and proposed changes in the social security statutes can have profound effects on worker behavior and on pensions themselves. In the context of an optimal lifetime compensation plan, pensions depend on efficient dates of retirement. To the extent that changes in social security affect the efficient date of retirement, both the pension and the wage profile itself will react. Four proposed changes in the social security system are analyzed.The cost savings associated with the change, as well as the effect on pensions and worker compensation in general are discussed.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Changes in social security statutes (H55) | Efficient date of retirement (J26) |
| Efficient date of retirement (J26) | Pension structures (H55) |
| Efficient date of retirement (J26) | Wage profiles (J31) |
| Changes in social security statutes (H55) | Pension costs to the system (H55) |
| Vesting provisions, benefit levels, and the earnings test (H55) | Retirement timing of workers (J26) |
| Optimal retirement age may shift from 65 to 68 (J26) | Average pension level (H55) |
| Optimal retirement age may shift from 65 to 68 (J26) | Penalties associated with delayed retirement (J26) |