NB19-14: Social Security and Retirement Around the World: Lessons from a 25-Year International Collaboration Project 14: Social Security and Retirement Around the World: Lessons from a 25-Year International Collaboration
The Social Security and Disability Insurance programs in the U.S. and similar programs in other developed countries play a critical role in both retirement security and retirement decisions, creating financial incentives that may encourage or discourage work at older ages. Differences in these programs across countries and differences within countries over time due to policy reforms provide a unique and valuable opportunity to assess the impact of retirement programs on retirement.
Drawing meaningful cross-country comparisons requires deep, country-specific knowledge of retirement programs and data as well as the ability to generate comparable analyses for different countries. The NBER’s International Social Security (ISS) project, a long-standing joint venture between researchers in the U.S., Canada, Japan, and nine European countries, was established twenty-five years ago to conduct such comparisons. In the decades since, nearly all ISS countries have enacted Social Security reforms in response to fiscal pressures and also experienced rising male and female labor force participation rates at older ages. This raises a critical question: how much of the increase in participation in recent decades can be explained by changing retirement incentives? An ongoing RRC project (“The Effect of Reforms on Retirement Incentives and Behavior,” NB17-17)) laid out a three-year agenda for answering this question, first documenting the changes in retirement incentives over time in ISS countries and then estimating their effect on retirement behavior. The findings from this research are being compiled in a ninth and tenth volume in an ongoing ISS series. Volume nine, reviewing reforms, incentives, and trends in labor market behavior is nearing completion. The analyses for volume ten (funded separately, see statement of complementarity below) are ongoing, and involve estimating country-specific retirement models using microdata. The incremental aim of this proposal is to: • Analyze the lessons learned from the 25-year collaboration of the ISS project in a non-technical, full-length article accessible to a wide audience. This study will place particular emphasis on the project’s recent and current work documenting the changes in retirement incentives over time and their role in explaining longer work lives, while also drawing on earlier ISS work for motivation and enduring lessons about retirement programs and retirement. • The target outlet for this article is a policy-oriented journal like the Journal of Economic Perspectives or Social Security Bulletin.
This project is supported by Social Security Administration under grant number 1RDR180000003-01-00.
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- Author: Shane Greenstein