The effect of part-time work on wages: Evidence from the Social Security Rules

TitleThe effect of part-time work on wages: Evidence from the Social Security Rules
Publication TypeJournal Article
Year of Publication2004
AuthorsAaronson, D, French, E
JournalJournal of Labor Economics
Volume22
Issue2
Pagination329-352
KeywordsEmployment and Labor Force, Older Adults, Social Security
Abstract

This article identifies the part-time wage effect, using hours variation caused by the Social Security rules. We show that work hours and wages drop sharply at ages 62 and 65. We argue that the hours decline causes the wage decline, resulting in a 25 wage penalty for men who cut their work week from 40 to 20 hours. However, we find little evidence for such an effect among women. We also show that models that fail to account for the joint determination of hours and wages will understate the labor supply response to a tax change by about 26 .

URLhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=295562
Citation Key6930