How did the Elimination of the Earnings Test above the Normal Retirement Age affect Retirement Expectations?

TitleHow did the Elimination of the Earnings Test above the Normal Retirement Age affect Retirement Expectations?
Publication TypeJournal Article
Year of Publication2008
AuthorsMichaud, P-C
JournalFisc Stud
Volume29
Issue2
Pagination197-231
Date Published2008 Jun 01
ISSN Number0143-5671
Abstract

We look at the effect of the 2000 repeal of the earnings test above the normal retirement age on retirement expectations of workers in the Health and Retirement Study, aged 51 to 61 in 1992. For men, we find that those whose marginal wage rate increased when the earnings test was repealed, had the largest increase in the probability to work full-time past normal retirement age. We do not find significant evidence of effects of the repeal of the earnings test on the probability to work past age 62 or the expected claiming age. On the other hand, for those reaching the normal retirement age, deviations between the age at which Social Security benefits are actually claimed and the previously reported expected age are more negative in 2000 than in 1998. Since our calculations show that the tax introduced by the earnings test was small when accounting for actuarial benefit adjustments and differential mortality, our results suggest that although male workers form expectations in a way consistent with forward-looking behavior, they misperceive the complicated rules of the earnings test. Results for females suggest similar patterns but estimates are imprecise.

DOI10.1111/j.1475-5890.2008.00073.x
User Guide Notes

http://www.ncbi.nlm.nih.gov/pubmed/21037938?dopt=Abstract

Endnote Keywords

labor Force Participation/social security earnings and benefits

Endnote ID

25210

Alternate JournalFisc Stud
Citation Key7284
PubMed ID21037938
PubMed Central IDPMC2964895
Grant ListP01 AG022481 / AG / NIA NIH HHS / United States
P01 AG022481-04 / AG / NIA NIH HHS / United States
R01 AG020717 / AG / NIA NIH HHS / United States