Social Security and Retirement in the U.S.

Peter Diamond, Jonathan Gruber

NBER Working Paper No. 6097
Issued in July 1997
NBER Program(s):Aging, Labor Studies, Public Economics

The largest entitlement program in the United States today is the Social Security program (SS). We provide an overview of the interaction between the SS system and retirement behavior. We begin by documenting historical trends in labor force participation and program receipt, and contemporaneous patterns of work and income receipt for the current cohort of older persons. We then present an overview of the structure of the SS program in the U.S., and review existing evidence on the relationship between SS and retirement. Finally, we present results of a simulation model which measures the implicit tax/subsidy rate on work after age 55 through the SS system. We find that, for married workers, the system is roughly neutral with respect to work after age 62, but that it heavily penalizes work after age 65. But there are larger tax rates on single workers and on high earning workers.

download in pdf format
   (629 K)

email paper

A non-technical summary of this paper is available in the January 1998 NBER digest.  You can sign up to receive the NBER Digest by email.

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w6097

Published: Gruber and Wise (eds.) Social Security and Retirement around the World. University of Chicago Press, 1998.

Users who downloaded this paper also downloaded* these:
Diamond and Gruber Social Security and Retirement in the United States
Coile and Gruber The Effect of Social Security on Retirement in the United States
Diamond w6719 The Economics of Social Security Reform
McCallum w6016 Issues in the Design of Monetary Policy Rules
Rebelo and Vegh w5197 Real Effects of Exchange Rate-Based Stabilization: An Analysis of Competing Theories
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us