Damon Jones (Chicago/Harris School) will present:

"The Social Security Earnings Test and Retirement: Evidence and Implications"

at 3pm this Wednesday, March 11, 2015 in 310 Silsby

Please sign up for a meeting, lunch, or dinner at:     (There is still one available meeting slot as well as lunch and dinner)

https://docs.google.com/spreadsheets/d/1ruo-dcxlna8Cqiq3t6BjGXEliu5J6hYCeYu4ONGMCY4/edit?usp=sharing

Abstract

We develop a novel methodology for estimating the impact of incentives to remain employed on the employment rate, and we use it to estimate the impact of the Social Security Old Age and Survivors' Insurance (OASI) Annual Earnings Test (AET) on the elderly employment rate. The AET reduces OASI claimants' current OASI benefits as a proportion of earnings, once a claimant earns in excess of an exempt amount, implying that the losses in current benefits due to the AET grow as earnings increase above the exempt amount. Using a Regression Kink Design, we document clear visual and statistical evidence that the probability of not working also increases discontinuously. We demonstrate how these empirical patterns may be translated into an elasticity of labor force participation with respect to the average net-of-tax rate.