Models of Endogenous Retirement and the Labor Supply Effects of Social Security

This proposal seeks to use general equilibrium models to assess the quantitative effects of social security programs on labor supply in general, and on retirement behavior in particular. Central to the analysis is the formulation of models that generate endogenous retirement. Previous work suggests that these models yield large labor supply elasticities for the retirement decision with respect to a standard tax and transfer program. This proposal uses such a model to evaluate the effects of changes in features of the US social security system. It also examines how the addition of home production influences the model’s properties and predictions.