scholarly journals Improving understanding of the retirement earnings test – CORRIGENDUM

2019 ◽  
Vol 19 (4) ◽  
pp. 567-567
Author(s):  
L. Rabinovich ◽  
F. Perez-Arce
Keyword(s):  
Earnings Test

scholarly journals Life-Cycle Welfare Costs of Social Security

1981 ◽  
Vol 9 (2) ◽  
pp. 123-142 ◽  
Author(s):  
Richard V. Burkhauser ◽  
John A. Turner
Keyword(s):  
Social Security ◽  
Income Tax ◽  
Personal Income ◽  
Personal Income Tax ◽  
Present Value Model ◽  
Potential Gain ◽  
The Social ◽  
Earnings Test ◽  
Social Security Earnings Test ◽  
Value Model

One-period models predict that a substantial welfare gain would result from removing the social security earnings test. In this article, we show that such models overestimate the size of potential gains. If one uses instead a two-period model, which captures intertemporal effects, the net result of removing the earnings test is ambiguous. In the presence of a personal income tax, workers who reduce their labor supply in the first period create a welfare loss which must also be considered. We use a present value model to estimate the change in lifetime welfare. We find that the net potential gain from removing the earnings test is probably small, especially when compared to the alternative of an increased personal income tax.

scholarly journals Estimating Adjustment Frictions Using Nonlinear Budget Sets: Method and Evidence from the Earnings Test

2020 ◽  
Vol 12 (1) ◽  
pp. 1-31 ◽  
Author(s):  
Alexander M. Gelber ◽  
Damon Jones ◽  
Daniel W. Sacks
Keyword(s):  
Adjustment Cost ◽  
Marginal Tax Rate ◽  
Tax Rate ◽  
The Social ◽  
Before And After ◽  
Short Run ◽  
Earnings Test ◽  
Social Security Earnings Test ◽  
The Cost ◽  
Induced Changes

We introduce a method for estimating the cost of adjusting earnings, as well as the earnings elasticity with respect to the net-of-tax share. Our method uses information on bunching in the earnings distribution at convex budget set kinks before and after policy-induced changes in the magnitude of the kinks: the larger is the adjustment cost, the smaller is the absolute change in bunching from before to after the policy change. In the context of the Social Security Earnings Test, our results demonstrate that the short-run impact of changes in the effective marginal tax rate can be substantially attenuated. (JEL H24, H31, H55, J22, J31)

scholarly journals The repeal of the retirement earnings test and the labor supply of older men

2009 ◽  
Vol 8 (4) ◽  
pp. 429-450 ◽  
Author(s):  
GARY V. ENGELHARDT ◽  
ANIL KUMAR
Keyword(s):  
Labor Supply ◽  
Time Preference ◽  
Senior Citizens ◽  
Liquidity Constraints ◽  
Older Men ◽  
The Social ◽  
Earnings Test ◽  
Using Data ◽  
The Impact ◽  
Retirement Study

AbstractThis paper examines the impact of the Senior Citizens Freedom to Work Act of 2000, which abolished the Social Security retirement earnings test for those aged 65–69, on the labor supply of older men using data from the 1996–2004 waves of the Health and Retirement Study (HRS). We use the fine structure of the 2000 Act to develop a new measure of exposure to the earnings test that varies across calendar years both by month and year of birth. We find that much, if not all, of the labor-supply response occurred for sub-groups of men who, either because of high mortality risk, high rates of pure time preference, or liquidity constraints, may have found the actuarial adjustment built into the earnings test relatively disadvantageous, particularly the lesser educated.

Sign in / Sign up

Export Citation Format

Share Document