Working Paper: NBER ID: w25281
Authors: Courtney Coile
Abstract: Employment rates of older men and women in the U.S. have been rising for the past several decades. Over the same period, there have been significant changes in Social Security and private pensions, which may have contributed to this trend. In this study, we examine how the financial incentive to work at older ages has evolved since 1980 as a result of changes in Social Security and private pensions. We find that the implicit tax on work after age 65 has dropped by about 15 percentage points for a typical worker as a result of Social Security reforms; incorporating the change in private pensions, the decline is larger. We provide suggestive evidence that the evolution of retirement incentives has affected retirement behavior.
Keywords: retirement incentives; social security; private pensions; labor force participation
JEL Codes: J14; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Social Security Reforms (H55) | Reduction in Implicit Tax on Work after Age 65 (J26) |
| Shift from Defined Benefit Pensions to Defined Contribution Pensions (H55) | Further Decrease in Implicit Tax on Work after Age 65 (J26) |
| Reduction in Implicit Tax on Work after Age 65 (J26) | Changes in Employment Rates for Older Workers (J26) |
| Changes in Retirement Incentives (J26) | Changes in Employment Rates for Older Women (J21) |