Project Year: 2002

In the past decade, researchers have made substantial improvements to survey questions that allow them to obtain more accurate information from survey respondents about income and wealth. However, changing survey questions–even for the better–can create...

More than 40 percent of Social Security beneficiaries continue to work after age 65. This research investigates the extent to which these individuals substitute labor across periods in response to anticipated wage changes induced by the Social Security earnings test....

The effect of Social Security rules on the age people choose to retire can be critical in evaluating proposed changes to those rules. This research derives a theory of retirement that views retirement as a special type of labor supply decision. This decision is driven...

This paper tests the Rational Expectations (RE) hypothesis regarding retirement expectations, controlling for sample selection, reporting biases, and unobserved heterogeneity. We find that retirement expectations in the Health and Retirement Study (HRS) are consistent...

The effects of poor health habits on mortality have been studied extensively. However, few studies have examined the impact of these health behaviors on workforce disability. In the Health and Retirement Study, a nationally representative cohort of 6044 Americans who...

Features of the Supplemental Security Income (SSI) program and the social security retirement system interact to create incentives for prospective participants in the aged portion of SSI to withdraw from the labor force and make an early old age insurance (OAI) claim...

We examine the effect of the 1996 welfare reform legislation on participation in the Supplemental Security income (SSI) program by non-citizen immigrants. Although none of the non-citizens on the SSI rolls before welfare reform lost eligibility, the potential exists...

This project explores the relationship between real-world lifetime earnings trajectories of actual workers, and several benchmark earnings paths used in Social Security policy analysis. We use the Health and Retirement Study (HRS) to compare actual workers’ covered...

This paper employs a lifecycle model from the consumption-savings literature to examine the tradeoffs between defined benefit and defined contribution pension plans. We examine the effects of varying risk aversion, varying initial income and financial wealth, and...

After a long commitment to defined benefit (DB) pension plans for US public sector employees, many state legislatures have introduced defined contribution (DC) plans for their public employees. In this process, investment risk, which was previously borne by state DB...

There is a pressing need for a better understanding of how access to various types of financial products can impact retirement behavior, especially if this access comes from a change in the incentive scheme through a reform of the current Social Security system. This...

Abstract from first paper: The President’s Commission to Strengthen Social Security suggests three plans for reforming Social Security. These plans divert various amounts of the payroll tax to a personal account if the worker chooses to participate in the account. In...

Economists’ most basic model for studying Social Security policy issues is the so—called life—cycle model of saving behavior. This paper sets up a life—cycle model in which a household simultaneously chooses its lifetime consumption profile and retirement age. The...

We develop a model of portfolio selection with subjective uncertainty and learning in order to explain why some people hold stocks while others don’t. We model heterogeneity in information directly, which is an alternative to the existing explanations that emphasized...

We found that there is a perception of ‘under-saving’ for retirement among many individuals. Individuals who perceive they have saved inadequately attribute this mainly to having insufficient income. Under a lifecycle model of consumption with a known income path this...

We use this model to simulate the retirement effects of a system of personal accounts based on a 10.6 percent contribution rate over the lifetime. One version allows individuals to make lump sum withdrawals at retirement instead of annuitizing. This program would...

An analysis of those who accepted window offers shows a sharp decline in employment and hours worked, earnings per hour, and annual earnings immediately following the accepted offer. Transitions to self-employment are more common among window acceptors than other...

Until recent years, very few elderly people had ever experienced divorce. Most had been married to one person their entire adult lives. This pattern is changing rapidly. The sharp rise in divorce between 1965 and 1975, with persistently high rates ever since, implies...