TY  - JOUR
AU  - Krueger,Alan B.
AU  - Pischke,Jorn-Steffen
TI  - The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3699
PY  - 1991
Y2  - May 1991
UR  - http://www.nber.org/papers/w3699
L1  - http://www.nber.org/papers/w3699.pdf
N1  - Author contact info:
Alan B. Krueger
Industrial Relations Section
Firestone Library
Princeton University
Princeton, NJ 08544
Tel: 609/258-4046
Fax: 609/258-2907
E-Mail: akrueger@princeton.edu

Jorn-Steffen Pischke
CEP
London School of Economics
Houghton Street
London WC2A 2AE
UNITED KINGDOM
Tel: 44-20-7955-6509
Fax: 44-20-7955-7595
E-Mail: s.pischke@lse.ac.uk
AB  - This paper uses aggregate birth year/calendar year level data derived from the Current Population Survey (CPS) to estimate the effect of Social Security wealth on the labor supply of older men in the 1970s and 1980s. The analysis focuses on the 1977 amendments to the Social Security Act t which created a substantial t unanticipated differential in benefits for otherwise identical individuals depending on whether they were born before or after 1917. This differential has become known as the benefit notch. There are two principal differences between the present analysis and the previous literature. First t this paper uses time-series variations in benefit levels to estimate the relationship between benefits and labor supply in an era when real benefits were falling for new recipients: Second t variation in benefit levels across cohorts is used to estimate the relationship between benefits and labor supply. The results support a conclusion that labor supply continued to decline for the "notch babies" who received lower Social Security benefits than earlier cohorts.
ER  -