Do the Elderly Respond to Taxes on Earnings? Evidence from the Social Security Retirement Earnings Test

50 Pages Posted: 11 Jul 2005

See all articles by David Loughran

David Loughran

RAND Corporation

Steven J. Haider

Michigan State University - Department of Economics; IZA Institute of Labor Economics

Date Written: January 2005

Abstract

The effective tax on earnings embodied in the Social Security retirement earnings test has been as high as 50 percent. Surprisingly, among the numerous empirical studies that have examined the earnings test, there is little agreement about whether the earnings test affects elderly labor supply at all. This paper examines new and reconsiders existing empirical evidence on the earnings test and conclude that, at least for men, the earnings test has a substantial impact on labor supply and claiming behavior.

Keywords: Postemployment benefits, aged, age and employment, old age, labor supply

JEL Classification: E24, H20, H55, J14

Suggested Citation

Loughran, David and Haider, Steven J., Do the Elderly Respond to Taxes on Earnings? Evidence from the Social Security Retirement Earnings Test (January 2005). RAND Working Paper Series No. WR-223, Available at SSRN: https://ssrn.com/abstract=754428 or http://dx.doi.org/10.2139/ssrn.754428

David Loughran (Contact Author)

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States
310-393-0411 x7257 (Phone)

Steven J. Haider

Michigan State University - Department of Economics ( email )

East Lansing, MI 48824
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
100
Abstract Views
1,469
Rank
479,249
PlumX Metrics