Reconsidering the Work Disincentive Effects of Social Security

24 Pages Posted: 28 Jun 2004 Last revised: 17 Jul 2010

See all articles by Alan S. Blinder

Alan S. Blinder

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Roger H. Gordon

University of California, San Diego (UCSD) - Department of Economics; Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Donald E. Wise

Rider University; National Bureau of Economic Research (NBER)

Date Written: October 1980

Abstract

This paper shows that, contrary to commonly held views, the provisions of the social security law actually provide strong work incentives for older men. The reason is that, for most workers, higher current earnings lead to higher future social security benefits. These incentives have been particularly strong for workers under 65 years of age and, although they will be reduced somewhat when the 1977 amendments to the social security law become fully effective, they will remain substantial. The findings raise serious questions about recent econometric work attributing the decline in labor force participation rates of older men to the social security system.

Suggested Citation

Blinder, Alan S. and Gordon, Roger H. and Wise, Donald E., Reconsidering the Work Disincentive Effects of Social Security (October 1980). NBER Working Paper No. w0562. Available at SSRN: https://ssrn.com/abstract=264396

Alan S. Blinder (Contact Author)

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER)

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Roger H. Gordon

University of California, San Diego (UCSD) - Department of Economics ( email )

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858-534-7040 (Fax)

Harvard University - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

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United States

Donald E. Wise

Rider University ( email )

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Management Sciences Department
Lawrenceville, NJ 08648
United States
609-895-5550 (Phone)
609-896-5304 (Fax)

HOME PAGE: http://www.soa.org/academic/rider_university.html

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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