Social Security and Retirement

Courtney Coile, Jonathan Gruber

NBER Working Paper No. 7830
Issued in August 2000
NBER Program(s):   AG   LS   PE

A critical question for Social Security policy is how program incentives affect retirement behavior. We use the wealth of new data available through the Health and Retirement Survey (HRS) to examine the impact of Social Security incentives on male retirement. We implement forward-looking models of retirement whereby individuals consider not just the incentives to work in the next year but in all future years as well. We find that such forward looking incentive measures for Social Security are significant determinants of retirement decisions. Our findings suggest that Social Security policies which increase the incentives to work at older ages can significantly reduce the exit rate of older workers from the labor force.

(430 K)

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Published: Coile, Courtney C. and Jonathan Gruber. “Future Social Security Entitlements and the Retirement Decision.” The Review of Economics and Statistics 89(2):234-246, May 2007.

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