UM04-05: The Impact of the 1972 Social Security Increase on Household Consumption



The 1972 Social Security benefit increase provides an opportunity to examine the consumption response to a large, permanent income increase. While prior research examined the labor supply response, the impact on consumption has generally been ignored. Using the 1972-73 Consumer Expenditure Survey, this project will examine whether consumption responded to the announcement and/or to the implementation of the benefit increase, and it will investigate the impact of the benefit increase on the composition of consumption.


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