Working Paper: NBER ID: w7651
Authors: Courtney Coile; Jonathan Gruber
Abstract: We present a detailed analysis of the incentives that Social Security provides for continued work at older ages. We do so using information on older males from the Health and Retirement Study over the 1980-1997 period to calculate the changes in the present discounted value of Social Security entitlements from additional work at each age. We find that the median male worker faces a small tax on work at ages 55-61, a near zero tax at ages 62-64, and a large tax at ages 65-69. However, there is significant heterogeneity in tax rates. We also document significant non-monotonicities in the accrual of Social Security entitlements with additional work, and suggest a more appropriate measure of incentive effects that considers accruals over not just the next year but future years as well.
Keywords: No keywords provided
JEL Codes: H3; H5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Social Security incentives (H55) | Retirement decisions (J26) |
| Tax on work at ages 55-61 (H29) | Retirement decisions (J26) |
| Near-zero tax at ages 62-64 (H29) | Retirement decisions (J26) |
| Large tax at ages 65-69 (H29) | Retirement decisions (J26) |
| Social Security entitlements (H55) | Non-monotonicities in retirement incentives (J26) |
| Retirement incentives (J26) | Retirement behavior (J26) |
| Tax rates (H29) | Retirement incentives (J26) |