TY  - JOUR
AU  - Costa,Dora L.
TI  - The Rise of Retirement Among African Americans: Wealth and Social Security Effects
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14462
PY  - 2008
Y2  - November 2008
UR  - http://www.nber.org/papers/w14462
L1  - http://www.nber.org/papers/w14462.pdf
N1  - Author contact info:
Dora Costa
Bunche Hall 9272
Department of Economics
UCLA
Box 951477
Los Angeles, CA 90095-1477
Tel: (310) 825-4249
Fax: (310) 825-9528
E-Mail: costa@econ.ucla.edu
AB  - I examine the effects of an unearned income transfer on the retirement rates and living arrangements of a very poor population by studying the effects of pensions on the decisions of black Union Army veterans.  I find that blacks were 2 to 5 times as responsive as whites to income transfers in their retirement decisions and 6 to 8 times as responsive in their choice of independent living arrangements.  I argue that blacks' greater poverty explains their responsiveness to pensions.  My findings have implications for understanding racial differences in trends in retirement and independent living.  I show that the retirement rates of both blacks and whites rose between 1900 and 1930 but that convergence in black and white rates and in living arrangements only occurred between 1930 and 1950. I argue that income effects from the institution of Social Security explain up to half of the convergence in black-white retirement rates and in living arrangements.
ER  -