Adjusting the Payroll Tax to Promote Longer Careers

Published: 2016
Project ID: UM16-01


This project will attempt to assess qualitatively and quantitatively a reform that has been suggested to encourage longer careers. The reform is a payroll tax cut targeted at older, near-retirement households. We are interested in the likely effect on labor force participation and household well-being, and the reform’s likely impact on government budgets. Although the reform would reduce payroll tax revenues for the Social Security System, it would tend to increase Federal income tax revenues. The project would seek to assess the overall balance of revenue changes.