Department of Economics
University of Virginia
Monroe Hall, Room 237
248 McCormick Rd
Charlottesville, VA 22903
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Information about this author at RePEc
NBER Working Papers and Publications
|March 2016||Government Old-Age Support and Labor Supply: Evidence from the Old Age Assistance Program|
with Daniel K. Fetter: w22132
Many major government programs transfer resources to older people and implicitly or explicitly tax their labor. In this paper, we shed new light on the labor supply and welfare effects of such programs by investigating the Old Age Assistance Program (OAA), a means-tested and state-administered pension program created by the Social Security Act of 1935. Using newly available Census data on the entire US population in 1940, we exploit the large differences in OAA programs across states to estimate the labor supply effects of OAA. Our estimates imply that OAA reduced the labor force participation rate among men aged 65–74 by 5.8 percentage points, nearly half of its 1930–40 decline. However, both reduced-form evidence and an estimated structural model of labor supply imply that the welfare co...
|December 2014||Incidental Bequests: Bequest Motives and the Choice to Self-Insure Late-Life Risks|
Despite facing significant uncertainty about how long they will live and how much costly health care they will require, few retirees buy life annuities or long-term care insurance. Low rates of long-term care insurance coverage are often interpreted as evidence against the importance of bequest motives since failing to buy insurance exposes bequests to significant risk. In this paper, however, I find that low rates of long-term care insurance coverage, especially in combination with the slow rate at which many retirees draw down their wealth, constitute evidence in favor of bequest motives. Retirees' saving and long-term care insurance choices are highly inconsistent with standard life cycle models in which people care only about their own consumption but match well models in which bequest...