The Effects of Social Security Reforms on Retirement Ages and RetirementIncomes

Gary S. Fields, Olivia S. Mitchell

NBER Working Paper No. 1348
Issued in May 1984
NBER Program(s):Labor Studies

Recent changes legislated in the U.S. Social Security system are changing the economic incentives to work and retire. Some older workers will respond to these new incentives by retiring at different ages. This paper evaluates the signs and magnitudes of these responses. Using a representative sample of male workers, we investigate the pre-reform earnings, private pensions, and Social Security profiles available at alternative retirement ages. Then we examine four specific changes in the structure of Social Security benefits: raising the normal retirement age, delaying the cost-of-living adjustment, lowering early retirement benefits, and increasing late retirement payments. Behavioral parameters are estimated using an ordered logit model of retirement ages; these are than used to evaluate how retirement behavior might respond to each of the four reforms.The largest retirement age response is observed for the policy change which cuts benefits at the earliest ages and offers larger rewards for continued work. This change would delay the average retirement age by about three months. The other reforms generate even smaller responses. Changes in retirement ages of this magnitude will be to small to compensate retirees for reductions in benefit formulas. Thus the Social Security's financial burden will be eased but retiree's incomes will fall on average.

download in pdf format
   (266 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1348

Published: Fields, Gary S. and Olivia S. Mitchell. "The Effects of Social Security Reforms on Retirement Ages and Retirement Incomes." Journal of Public Economics, Winter, 1984. citation courtesy of

Users who downloaded this paper also downloaded* these:
Fields and Mitchell w0876 Economic Determinants of the Optimal Retirement Age: An Empirical Investigation
Boskin and Hurd w0204 The Effect of Social Security on Early Retirement
Diamond and Gruber Social Security and Retirement in the United States
Gruber and Wise w9407 Social Security Programs and Retirement Around the World: Micro Estimation
Maurer and Mitchell w22942 Older Peoples’ Willingness to Delay Social Security Claiming
NBER Videos

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

Contact Us