TY  - JOUR
AU  - Neumark,David
AU  - Powers,Elizabeth T.
TI  - The Effects of Changes in State SSI Supplements on Pre-Retirement Labor Supply
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9851
PY  - 2003
Y2  - July 2003
UR  - http://www.nber.org/papers/w9851
L1  - http://www.nber.org/papers/w9851.pdf
N1  - Author contact info:
David Neumark
Department of Economics
University of California at Irvine
3151 Social Science Plaza
Irvine, CA  92697
Tel: 949-824-8496
Fax: 949/824-2182
E-Mail: dneumark@uci.edu
AB  - Because the Supplemental Security Income (SSI) program is means-tested, with both income limits and asset limits, those on the margin of eligibility for the elderly component of the program face incentives to reduce labor supply (or earnings) prior to becoming eligible.  Our past research relying on cross-state variation in SSI benefits found evidence consistent with the predicted negative labor supply effects.  However, a reliance on cross-state variation necessitated reliance on less-than-ideal control samples.  In contrast, this paper uses CPS data covering a 22-year period, which permit identification of the effects of SSI from within-state, time-series variation in SSI benefits, using a better control sample.  The evidence points consistently to negative effects of more generous SSI payments on the labor supply of likely SSI participants aged 62-64.  The implied elasticities of labor supply with respect to benefits, for those with a high probability of SSI participation, are generally in the range of  0.2 to  0.3, looking at both employment and hours of work.
ER  -