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<h1 itemprop="headline">Evaluating the Initial Impact of Eliminating the Retirement Earnings Test</h1>
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<div id="hByline">by <span itemprop="author">Jae G. Song</span><br> Social Security Bulletin, <abbr title="Volume">Vol.</abbr> 65, <abbr title="Number">No.</abbr> 1, 2003/2004 (released May 2004)</div>
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<p id="synopsis" itemprop="description">How did workers aged <span class="nobr">65–69</span> respond to the removal of the retirement earnings test in 2000? Using Social Security administrative data matched with data from the Survey of Income and Program Participation, the author finds that the higher earners in this group increased their earnings, while the lower earners did not. The author reports an acceleration of benefit applications by workers aged <span class="nobr">65–69</span> but no clear evidence of increased employment in this age group.</p>
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<div class="eightypercent">
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<p>The author is with the Division of Economic Research, Office of Research, Evaluation, and Statistics, Office of Policy, Social Security Administration.</p>
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<p><i>Acknowledgments:</i> The author is grateful to Joyce Manchester for her support and comments. The author thanks Susan Grad, Howard Iams, Kajal Lahiri, Michael Leonesio, David Stapleton, and David Weaver for their comments and suggestions and Nancy O'Hara and Patrice Cole for their help.</p>
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<p>Contents of this publication are <a href="/policy/accessibility.html">not copyrighted</a>; any items may be reprinted, but citation of the <i>Social Security Bulletin</i> as the source is requested. The findings and conclusions presented in the <i>Bulletin</i> are those of the authors and do not necessarily represent the views of the Social Security Administration.</p>
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<h2>Summary</h2>
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<p>Under the retirement earnings test, Social Security benefits are reduced if earnings exceed specified amounts, although the benefit reduction is partly offset by future benefit increases. By imposing a tax on the earnings of beneficiaries, the earnings test provided a disincentive for them to supplement retirement income by working. The Senior Citizens Freedom to Work Act of 2000 eliminated the earnings test for Social Security beneficiaries who have reached the full retirement age.</p>
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<p>This article presents the first study of labor force activity (earnings and employment) among individuals aged <span class="nobr">65–69</span> before and immediately after this sudden rule change. Drawing on Social Security administrative data, the author examines three widely expected reactions: increased return to work, increased hours worked, and accelerated applications for old-age benefits.</p>
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<p>The analysis finds that removing the retirement earnings test:</p>
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<ul>
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<li><i>Encouraged some workers to increase their earnings.</i> The increases in earnings are large and significant among higher earners but are not statistically significant among lower earners.</li>
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<li><i>Had little effect on employment.</i> Removing the earnings test appears to have had no immediate, significant effect on the employment rate of older workers. Employment of older people may be affected in the longer run, however.</li>
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<li><i>Slightly increased the pace of applications for benefits.</i> Applications rose about 2 percent in the <span class="nobr">65–69</span> age group in 2000. The overall acceleration will probably be small, however, because most individuals in this age group apply for benefits before reaching the full retirement age.</li>
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</ul>
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<p>Although the current analysis captures the effects of retaining older workers in the labor force, these initial results may not capture all the effects of eliminating the retirement earnings test, however, for two reasons. First, the analysis covers only a single year—the year the earnings test was eliminated. Since eliminating the earnings test may have had little effect on people who had already retired, its full effect may not be apparent for several years. Second, the analysis applies only to workers aged <span class="nobr">65–69</span>. Eliminating the earnings test for people above the full retirement age may also encourage younger workers to delay retirement and therefore increase their labor supply. Further analysis will therefore be required to determine the longer-run impact of eliminating the retirement earnings test.</p>
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<h2>Introduction</h2>
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<p>The Senior Citizens Freedom to Work Act of 2000 eliminated the retirement earnings test (RET) for Social Security beneficiaries who have reached the full retirement age (FRA).<sup><a href="#mn1" id="mt1">1</a></sup> The removal of the RET allows older workers to remain in the labor force beyond their FRA without having their retirement benefits withheld.<sup><a href="#mn2" id="mt2">2</a></sup> Although not signed into law until April 7, 2000, the act applied to all of 2000 and affected everyone aged <span class="nobr">65–69</span> in that year. This change provides an exceptional opportunity for gauging the labor supply disincentive effect of Social Security programs using an experimental framework (Krueger and Meyer 2002).</p>
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<p>The RET has drawn considerable attention from economists investigating the labor supply disincentive effect of Social Security benefits. Although results from past studies indicated that the earnings test affects the incentive for working, the estimated magnitude of this effect varies among studies.<sup><a href="#mn3" id="mt3">3</a></sup> Early studies relied primarily on cross-sectional variations in benefit amounts. In two recent studies, Friedberg (2000) and Gruber and Orszag (2000), using an experimental approach, noticed that modifications of the RET affected some groups but not others.<sup><a href="#mn4" id="mt4">4</a></sup> Yet the two studies reached different conclusions. Friedberg's results indicated a small but significant RET effect on the labor supply of older workers. Gruber and Orszag's indicated that the RET had no robust influence on the labor supply and appeared to accelerate benefit receipt among eligible individuals.</p>
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<p>This article presents the first study of reactions in the labor force activity (earnings and employment) of individuals aged <span class="nobr">65–69</span> in response to the RET removal in 2000. It examines three widely expected reactions from that age group: an increased employment rate, increased hours worked, and accelerated applications for old-age benefits.<sup><a href="#mn5" id="mt5">5</a></sup> The availability of Social Security administrative data matched with Survey of Income and Program Participation (SIPP) data covering the time both before and after the 2000 RET removal allowed the use of a simple experimental evaluation method rather than a more complicated structural evaluation.<sup><a href="#mn6" id="mt6">6</a></sup> Although the RET removal may increase the earnings of those affected, the effects are likely to be uneven across the earnings distribution (see, for example, Packard 1990). Unlike other evaluation studies that focus on mean effects, this study evaluates effects across the distribution of an outcome variable using quantile (percentile) regression.<sup><a href="#mn7" id="mt7">7</a></sup></p>
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<p>This study finds that:</p>
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<ul>
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<li>The effect of the RET removal on earnings (work effort) is uneven over the earnings distribution—large and significant in the higher percentiles but not statistically significant in the lower percentiles. Thus, the removal appears to increase earnings (labor hours) for individuals with higher earnings.</li>
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<li>There is no clear evidence of the effect of the RET removal on the labor force participation (employment) rate.</li>
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<li>Applications for benefits accelerated after the removal of the RET. A higher ratio of individuals aged <span class="nobr">65–69</span> appeared in the 2000 applicant pool than in previous years (about 2 percent of the applicant population aged <span class="nobr">65–69</span> appears to be attributable to the RET removal in 2000).</li>
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</ul>
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<h2>Retirement Earnings Test and Data Sets Used</h2>
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<p>The RET operates in a relatively simple manner: current Social Security benefits are reduced if earnings exceed the threshold amounts, and the reduction in those benefits is partly offset by future benefit increases. For workers who do not receive benefits because of the RET (or for any other reason), future benefits are increased for each month that benefits are not paid. This increase, called a delayed retirement credit, is being gradually increased and will reach an actuarially fair rate for people who turn age 65 in 2008. During the period analyzed in this study, however, the credit was below the actuarially fair rate. Thus, the RET reduces the work effort of beneficiaries and delays benefit applications by working nonbeneficiaries.</p>
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<p>Before 2000, the RET had been altered several times. Effective in 1990, the benefit withholding rate was lowered from $1 for each $2 of earnings above the RET threshold to $1 for each $3 for individuals aged <span class="nobr">65–69</span>. The RET thresholds for individuals aged <span class="nobr">65–69</span> as of 1995, 1996, 1997, 1998, and 1999 were $11,280, $12,500, $13,500, $14,500, and $15,500, respectively. Although the RET no longer applies to most individuals who attain the full retirement age, beneficiaries who have not reached the FRA by the end of the prior year are still subject to the RET in the year they reach the FRA (Social Security Administration 2001a, 123).</p>
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<p>Samples used in this study are drawn from the 1996 SIPP panel. The SIPP records are matched with Social Security Administration (SSA) administrative data. The SSA Summary Earnings Record (SER) provides historical information on earnings, and the Master Beneficiary Record (MBR) files supply information about application for and entitlement to retirement benefits. In addition, the SSA Supplemental Security Record (SSR) is used to identify the benefit entitlement status of Supplemental Security Income (SSI) applicants, and the Numident file is used to identify and remove the records of those who died during the study period.<sup><a href="#mn8" id="mt8">8</a></sup></p>
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<p>The SIPP is a national survey by the U.S. Census Bureau designed as a continuous series of national panels, since 1984, with sample sizes ranging from 14,000 to 36,700 interviewed households. The 1996 SIPP panel consists of 12 waves covering 48 months from October, November, or December 1995, or January 1996, depending on the rotation group. Each wave consists of a core file and a topical module. Core files provide individual and family demographic characteristics and income and earnings information for 1996 to 1999. The 1996 SIPP topical module files provide data on health care and medical expenditures (as well as wealth and assets) in <span class="nobr">1-year</span> intervals in waves 3, 6, 9, and 12.</p>
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<p>The SER file contains annual summaries of individuals' Social Security taxable earnings from 1951 to the present and the total amount they earned in the <span class="nobr">14-year</span> period between 1937 and 1950. The extract of the SER used in this study includes both annual earnings through calendar year 2000 and annual quarters of coverage earned.<sup><a href="#mn9" id="mt9">9</a></sup> To be eligible for Social Security benefits, a worker must have acquired the minimum number of quarters of coverage.<sup><a href="#mn10" id="mt10">10</a></sup> Benefit amounts are based on the size of covered earnings over that period (Myers 1993).</p>
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<p>The MBR file contains the data needed to calculate Social Security benefit amounts under the Old-Age Survivors, and Disability Insurance (OASDI) programs—including data on both age-related and disability-related retirees. An MBR record is established whenever an individual applies for benefits and the application is approved. The MBR can be used to identify whether a person has applied for retirement benefits, whether he or she is being paid benefits, and what the benefit amount is.<sup><a href="#mn11" id="mt11">11</a></sup> The MBR extract used in this study contains OASDI application data through 2001.</p>
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<p>Although the SIPP covers only January 1996 through March 2000 (depending on rotation group), the MBR and SER both cover the full year 2000. Thus, the data sets can be used to investigate changes in labor force activities of individuals aged <span class="nobr">65–69</span> before (1996–1999) and after (2000) the removal of the RET. This study uses two labor force performance variables to measure the effect of the RET removal: the SER annual earnings to indicate whether the RET removal caused older workers to work more than they did before the removal, and annual Social Security taxable earnings (including zero earnings) to determine whether older workers participated in the labor force.<sup><a href="#mn12" id="mt12">12</a>,<a href="#mn13" id="mt13">13</a></sup> This information about annual participation reflects whether the RET removal induced older workers to reenter the labor force.</p>
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<h2>Labor Force Behavior of Individuals Aged <span class="nobr">65–69</span></h2>
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<p>The likely labor force effect of removing the RET depends on the size of the age group being considered and the number of individuals who modify their work behavior in response to its removal. Authors of previous studies have argued that the RET removal would have no significant effect on the aggregated work level because personal and economic characteristics of most individuals aged <span class="nobr">65–69</span> make them unlikely to be affected (Packard 1990; Gruber and Orszag 2000). This analysis therefore begins with a description of the labor force status and characteristics of individuals aged <span class="nobr">65–69</span>.</p>
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<p>Out of a total U.S. population of 284.3 million in 1999, 9.6 million individuals were aged <span class="nobr">65–69</span>. Eighty-three percent of them were fully insured. OASDI beneficiaries in the three major categories (retired workers, spouses, and <span class="nobr">widow(er)s</span>) totaled 8.35 million (87 percent of the 9.6 million).<sup><a href="#mn14" id="mt14">14</a></sup> Table 1 reports the labor force status of SIPP respondents aged <span class="nobr">65–69</span>. It shows the (earliest) OASDI benefit entitlement age for OASDI benefits for individuals who reached ages <span class="nobr">65–69</span> in each year from 1996 through 2000. As expected, nearly 90 percent of those aged <span class="nobr">65–69</span> are OASDI beneficiaries, and 5.4 percent to 6.2 percent are SSI beneficiaries.<sup><a href="#mn15" id="mt15">15</a></sup> About 80 percent of individuals aged <span class="nobr">65–69</span> are fully insured.<sup><a href="#mn16" id="mt16">16</a></sup> Slightly more than 25 percent appear to have been employed (or have Social Security taxable earnings) during the year they reached ages <span class="nobr">65–69</span>; more than 6 percent earned more than the earnings-test threshold.<sup><a href="#mn17" id="mt17">17</a></sup> These workers with recent earnings are the ones most likely to be affected by removing the retirement earnings test.</p>
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<div class="table" id="table1">
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<table>
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<caption><span class="tableNumber">Table 1. </span>Labor force status of <abbr>SIPP</abbr> respondents aged <span class="nobr">65–69,</span> <span class="nobr">1996–2000</span></caption>
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<colgroup span="1" style="width:22em"></colgroup>
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<colgroup span="2" style="width:5em"></colgroup>
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<colgroup span="2" style="width:5em"></colgroup>
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<colgroup span="2" style="width:5em"></colgroup>
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<colgroup span="2" style="width:5em"></colgroup>
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<thead>
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<tr>
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<th rowspan="2" class="stubHeading" scope="colgroup">Universe</th>
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<th colspan="2" class="spanner" scope="colgroup">1996</th>
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<th colspan="2" class="spanner" scope="colgroup">1997</th>
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<th colspan="2" class="spanner" scope="colgroup">1998</th>
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<th colspan="2" class="spanner" scope="colgroup">1999</th>
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<th colspan="2" class="spanner" scope="colgroup">2000</th>
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<tr>
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<th scope="col">Number</th>
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<th scope="col">Percent</th>
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<th scope="col">Number</th>
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<th scope="col">Percent</th>
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<th scope="col">Number</th>
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<th scope="col">Percent</th>
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<th scope="col">Number</th>
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<th scope="col">Percent</th>
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<th scope="col">Number</th>
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<th scope="col">Percent</th>
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</tr>
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</thead>
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<tbody>
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<tr class="topPad1">
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<th class="stub0" scope="rowgroup">All aged <span class="nobr">65–69</span></th>
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<td>3,101</td>
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<td>. . .</td>
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<td>3,071</td>
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<td>. . .</td>
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<td>3,027</td>
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<td>. . .</td>
|
|
<td>2,945</td>
|
|
<td>. . .</td>
|
|
<td>2,970</td>
|
|
<td>. . .</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup"><abbr class="spell">OASDI</abbr> beneficiaries<sup>a</sup></th>
|
|
<td>2,732</td>
|
|
<td>88.1</td>
|
|
<td>2,700</td>
|
|
<td>87.9</td>
|
|
<td>2,675</td>
|
|
<td>88.4</td>
|
|
<td>2,619</td>
|
|
<td>88.9</td>
|
|
<td>2,648</td>
|
|
<td>89.2</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup"><abbr class="spell">OASDI</abbr> beneficiaries, by age at entitlement</th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">61 or younger</th>
|
|
<td>388</td>
|
|
<td>14.2</td>
|
|
<td>402</td>
|
|
<td>14.9</td>
|
|
<td>398</td>
|
|
<td>14.9</td>
|
|
<td>396</td>
|
|
<td>15.1</td>
|
|
<td>420</td>
|
|
<td>15.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">62</th>
|
|
<td>1,426</td>
|
|
<td>52.2</td>
|
|
<td>1,372</td>
|
|
<td>50.8</td>
|
|
<td>1,385</td>
|
|
<td>51.8</td>
|
|
<td>1,342</td>
|
|
<td>51.2</td>
|
|
<td>1,353</td>
|
|
<td>51.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row"><span class="nobr">63–64</span></th>
|
|
<td>557</td>
|
|
<td>20.4</td>
|
|
<td>569</td>
|
|
<td>21.1</td>
|
|
<td>531</td>
|
|
<td>19.9</td>
|
|
<td>523</td>
|
|
<td>20.0</td>
|
|
<td>481</td>
|
|
<td>18.2</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">65</th>
|
|
<td>306</td>
|
|
<td>11.2</td>
|
|
<td>305</td>
|
|
<td>11.3</td>
|
|
<td>301</td>
|
|
<td>11.3</td>
|
|
<td>290</td>
|
|
<td>11.1</td>
|
|
<td>330</td>
|
|
<td>12.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">66 or older</th>
|
|
<td>55</td>
|
|
<td>2.0</td>
|
|
<td>52</td>
|
|
<td>1.9</td>
|
|
<td>60</td>
|
|
<td>2.2</td>
|
|
<td>68</td>
|
|
<td>2.6</td>
|
|
<td>64</td>
|
|
<td>2.4</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup"><abbr class="spell">SSI</abbr> beneficiaries</th>
|
|
<td>193</td>
|
|
<td>6.2</td>
|
|
<td>184</td>
|
|
<td>6.0</td>
|
|
<td>163</td>
|
|
<td>5.4</td>
|
|
<td>159</td>
|
|
<td>5.4</td>
|
|
<td>174</td>
|
|
<td>5.9</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup">Fully insured</th>
|
|
<td>2,453</td>
|
|
<td>79.1</td>
|
|
<td>2,437</td>
|
|
<td>79.4</td>
|
|
<td>2,421</td>
|
|
<td>80.0</td>
|
|
<td>2,370</td>
|
|
<td>80.5</td>
|
|
<td>2,403</td>
|
|
<td>80.9</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup">Employed, earnings above zero</th>
|
|
<td>801</td>
|
|
<td>25.8</td>
|
|
<td>835</td>
|
|
<td>27.2</td>
|
|
<td>823</td>
|
|
<td>27.2</td>
|
|
<td>827</td>
|
|
<td>28.1</td>
|
|
<td>851</td>
|
|
<td>28.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Earnings above RET threshold<sup>b</sup></th>
|
|
<td>207</td>
|
|
<td>6.7</td>
|
|
<td>201</td>
|
|
<td>6.6</td>
|
|
<td>203</td>
|
|
<td>6.7</td>
|
|
<td>181</td>
|
|
<td>6.2</td>
|
|
<td>222</td>
|
|
<td>7.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Earnings below RET threshold</th>
|
|
<td>594</td>
|
|
<td>19.2</td>
|
|
<td>634</td>
|
|
<td>20.6</td>
|
|
<td>620</td>
|
|
<td>20.5</td>
|
|
<td>646</td>
|
|
<td>21.9</td>
|
|
<td>629</td>
|
|
<td>21.2</td>
|
|
</tr>
|
|
<tr class="topPad1">
|
|
<th class="stub0" scope="rowgroup">Non-<abbr class="spell">OASDI</abbr> or <abbr class="spell">SSI</abbr> beneficiaries</th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Insured</th>
|
|
<td>103</td>
|
|
<td>. . .</td>
|
|
<td>92</td>
|
|
<td>. . .</td>
|
|
<td>74</td>
|
|
<td>. . .</td>
|
|
<td>59</td>
|
|
<td>. . .</td>
|
|
<td>46</td>
|
|
<td>. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Not insured</th>
|
|
<td>185</td>
|
|
<td>. . .</td>
|
|
<td>203</td>
|
|
<td>. . .</td>
|
|
<td>211</td>
|
|
<td>. . .</td>
|
|
<td>206</td>
|
|
<td>. . .</td>
|
|
<td>211</td>
|
|
<td>. . .</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="11">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation (<abbr>SIPP</abbr>) matched with the Social Security Administration's Master Beneficiary Record and Supplemental Earnings Record files.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="11">NOTE: . . . = not applicable; RET = retirement earnings test.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="11">a. Includes both primary and auxiliary beneficiaries whose benefit entitlements were met as of December 31 of the previous year. The numbers of primary beneficiaries in 1996 through 2000 are 2,385, 2,395, 2,417, 2,437, and 2,470, respectively. </td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="11">b. For illustrative purposes, this article uses $16,500 for the RET threshold for 2000.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>Another expected effect of removing the RET is accelerated applications for OASDI benefits. Table 1 shows that most OASDI beneficiaries began to receive benefits before full retirement age during the period before the 2000 removal of the RET. The number of individuals who are neither OASDI nor SSI beneficiaries in each of the 5 years is less than 7 percent of the age group, and most of them are uninsured. These numbers suggest that OASDI applications may increase because of the removal of the RET. The magnitude of the total increase probably will be small, however, because most of the individuals in this age group have already applied for benefits before they reach the FRA.</p>
|
|
<p>Older workers' labor force activities depend on factors such as their health, personal preferences, and other income (for example, private pensions, means-tested benefits, and spouse's income). Table 2 reports selected characteristics of beneficiaries aged <span class="nobr">65–69</span> by their earnings amounts during the 1996 SIPP panel period (1996–1999).<sup><a href="#mn18" id="mt18">18</a></sup> Results indicate significant variations in education levels across different earnings groups. Only 13 percent to 16 percent of those who have nonzero earnings below the earnings-test thresholds have college degrees or higher, compared with 28 percent to 33 percent of those who earned more than the thresholds. Both health conditions and occupation types also vary significantly across different earnings groups. Healthy workers in professional occupations earn more than the threshold amounts. While median values of net worth of these higher earners are almost two times higher than those of other groups, per capita family incomes (net of personal earnings) are similar across the different groups. Those who are better educated, workers in professional occupations and industries, and those who are healthy are more likely to be employed between the ages of 65 and 69 and to earn more than the yearly RET thresholds (Table 2).</p>
|
|
<div class="table" id="table2">
|
|
<table>
|
|
<caption><span class="tableNumber">Table 2. </span>Mean characteristics of beneficiaries aged <span class="nobr">65–69,</span> by employment status and earnings, <span class="nobr">1996–1999</span></caption>
|
|
<colgroup span="1" style="width:24em"></colgroup>
|
|
<colgroup span="3" style="width:7em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th rowspan="2" class="stubHeading" id="c1">Characteristic</th>
|
|
<th colspan="2" class="spanner" id="c2">Employed</th>
|
|
<th rowspan="2" id="c3">Not employed</th>
|
|
</tr>
|
|
<tr>
|
|
<th id="c4" headers="c2">Earnings above RET threshold</th>
|
|
<th id="c5" headers="c2">Earnings below RET threshold</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="3" class="panel" id="r1">1996 (N = 2,732)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r2" headers="r1 c1">Age (years)</th>
|
|
<td headers="r1 r2 c2 c4">67.9</td>
|
|
<td headers="r1 r2 c2 c5">67.8</td>
|
|
<td headers="r1 r2 c3">68.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r3" headers="r1 c1">Male</th>
|
|
<td headers="r1 r3 c2 c4">0.6</td>
|
|
<td headers="r1 r3 c2 c5">0.6</td>
|
|
<td headers="r1 r3 c3">0.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r4" headers="r1 c1">White, non-Hispanic</th>
|
|
<td headers="r1 r4 c2 c4">0.8</td>
|
|
<td headers="r1 r4 c2 c5">0.7</td>
|
|
<td headers="r1 r4 c3">0.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r5" headers="r1 c1">Education (16 years or more)</th>
|
|
<td headers="r1 r5 c2 c4">0.30</td>
|
|
<td headers="r1 r5 c2 c5">0.16</td>
|
|
<td headers="r1 r5 c3">0.11</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r6" headers="r1 c1">Work-limiting health</th>
|
|
<td headers="r1 r6 c2 c4">0.13</td>
|
|
<td headers="r1 r6 c2 c5">0.25</td>
|
|
<td headers="r1 r6 c3">0.39</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r7" headers="r1 c1">Medical expenditures (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r8" headers="r1 r7 c1">Mean</th>
|
|
<td headers="r1 r7 r8 c2 c4">1.1</td>
|
|
<td headers="r1 r7 r8 c2 c5">1.1</td>
|
|
<td headers="r1 r7 r8 c3">1.3</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r9" headers="r1 r7 c1">Median</th>
|
|
<td headers="r1 r7 r9 c2 c4">0.5</td>
|
|
<td headers="r1 r7 r9 c2 c5">0.6</td>
|
|
<td headers="r1 r7 r9 c3">0.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r10" headers="r1 c1">Net worth (tens of thousands of dollars)<sup>b</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r11" headers="r1 r10 c1">Mean</th>
|
|
<td headers="r1 r10 r11 c2 c4">43.6</td>
|
|
<td headers="r1 r10 r11 c2 c5">22.0</td>
|
|
<td headers="r1 r10 r11 c3">21.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r12" headers="r1 r10 c1">Median</th>
|
|
<td headers="r1 r10 r12 c2 c4">20.8</td>
|
|
<td headers="r1 r10 r12 c2 c5">10.9</td>
|
|
<td headers="r1 r10 r12 c3">10.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r13" headers="r1 c1">Family income (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r14" headers="r1 r13 c1">Mean</th>
|
|
<td headers="r1 r13 r14 c2 c4">67.0</td>
|
|
<td headers="r1 r13 r14 c2 c5">34.3</td>
|
|
<td headers="r1 r13 r14 c3">30.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r15" headers="r1 r13 c1">Median</th>
|
|
<td headers="r1 r13 r15 c2 c4">45.8</td>
|
|
<td headers="r1 r13 r15 c2 c5">29.5</td>
|
|
<td headers="r1 r13 r15 c3">25.3</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r16" headers="r1 r13 c1">Per capita</th>
|
|
<td headers="r1 r13 r16 c2 c4">16.0</td>
|
|
<td headers="r1 r13 r16 c2 c5">14.8</td>
|
|
<td headers="r1 r13 r16 c3">15.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r17" headers="r1 c1">Median net earnings (thousands of dollars)<sup>a</sup></th>
|
|
<td headers="r1 r17 c2 c4">11.5</td>
|
|
<td headers="r1 r17 c2 c5">12.5</td>
|
|
<td headers="r1 r17 c3">12.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r18" headers="r1 c1">Occupation</th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r19" headers="r1 r18 c1">Self-employed</th>
|
|
<td headers="r1 r18 r19 c2 c4">0.54</td>
|
|
<td headers="r1 r18 r19 c2 c5">0.53</td>
|
|
<td headers="r1 r18 r19 c3">0.30</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r20" headers="r1 r18 c1">Professional occupation<sup>a</sup></th>
|
|
<td headers="r1 r18 r20 c2 c4">0.41</td>
|
|
<td headers="r1 r18 r20 c2 c5">0.17</td>
|
|
<td headers="r1 r18 r20 c3">0.03</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r21" headers="r1 r18 c1">Professional services industry</th>
|
|
<td headers="r1 r18 r21 c2 c4">0.37</td>
|
|
<td headers="r1 r18 r21 c2 c5">0.25</td>
|
|
<td headers="r1 r18 r21 c3">0.03</td>
|
|
</tr>
|
|
<tr>
|
|
<td></td>
|
|
<th colspan="3" class="panel" id="r22">1997 (N = 2,700)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r23" headers="r22 c1">Age (years)</th>
|
|
<td headers="r22 r23 c2 c4">66.6</td>
|
|
<td headers="r22 r23 c2 c5">66.8</td>
|
|
<td headers="r22 r23 c3">67.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r24" headers="r22 c1">Male</th>
|
|
<td headers="r22 r24 c2 c4">0.6</td>
|
|
<td headers="r22 r24 c2 c5">0.6</td>
|
|
<td headers="r22 r24 c3">0.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r25" headers="r22 c1">White, non-Hispanic</th>
|
|
<td headers="r22 r25 c2 c4">0.7</td>
|
|
<td headers="r22 r25 c2 c5">0.7</td>
|
|
<td headers="r22 r25 c3">0.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r26" headers="r22 c1">Education (16 years or more)</th>
|
|
<td headers="r22 r26 c2 c4">0.30</td>
|
|
<td headers="r22 r26 c2 c5">0.13</td>
|
|
<td headers="r22 r26 c3">0.11</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r27" headers="r22 c1">Work-limiting health</th>
|
|
<td headers="r22 r27 c2 c4">0.08</td>
|
|
<td headers="r22 r27 c2 c5">0.23</td>
|
|
<td headers="r22 r27 c3">0.31</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r28" headers="r22 c1">Medical expenditures (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r29" headers="r22 r28 c1">Mean</th>
|
|
<td headers="r22 r28 r29 c2 c4">1.4</td>
|
|
<td headers="r22 r28 r29 c2 c5">1.1</td>
|
|
<td headers="r22 r28 r29 c3">1.2</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r30" headers="r22 r28 c1">Median</th>
|
|
<td headers="r22 r28 r30 c2 c4">0.7</td>
|
|
<td headers="r22 r28 r30 c2 c5">0.6</td>
|
|
<td headers="r22 r28 r30 c3">0.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r31" headers="r22 c1">Net worth (tens of thousands of dollars)<sup>b</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r32" headers="r22 r31 c1">Mean</th>
|
|
<td headers="r22 r31 r32 c2 c4">62.4</td>
|
|
<td headers="r22 r31 r32 c2 c5">25.1</td>
|
|
<td headers="r22 r31 r32 c3">23.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r33" headers="r22 r31 c1">Median</th>
|
|
<td headers="r22 r31 r33 c2 c4">21.1</td>
|
|
<td headers="r22 r31 r33 c2 c5">11.6</td>
|
|
<td headers="r22 r31 r33 c3">10.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r34" headers="r22 c1">Family income (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r35" headers="r22 r34 c1">Mean</th>
|
|
<td headers="r22 r34 r35 c2 c4">65.7</td>
|
|
<td headers="r22 r34 r35 c2 c5">34.9</td>
|
|
<td headers="r22 r34 r35 c3">30.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r36" headers="r22 r34 c1">Median</th>
|
|
<td headers="r22 r34 r36 c2 c4">52.2</td>
|
|
<td headers="r22 r34 r36 c2 c5">28.4</td>
|
|
<td headers="r22 r34 r36 c3">22.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r37" headers="r22 r34 c1">Per capita</th>
|
|
<td headers="r22 r34 r37 c2 c4">16.1</td>
|
|
<td headers="r22 r34 r37 c2 c5">15.5</td>
|
|
<td headers="r22 r34 r37 c3">15.0</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r38" headers="r22 c1">Median net earnings (thousands of dollars)<sup>a</sup></th>
|
|
<td headers="r22 r38 c2 c4">13.2</td>
|
|
<td headers="r22 r38 c2 c5">13.0</td>
|
|
<td headers="r22 r38 c3">12.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r39" headers="r22 c1">Occupation</th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r40" headers="r22 r39 c1">Self-employed</th>
|
|
<td headers="r22 r39 r40 c2 c4">0.45</td>
|
|
<td headers="r22 r39 r40 c2 c5">0.54</td>
|
|
<td headers="r22 r39 r40 c3">0.31</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r41" headers="r22 r39 c1">Professional occupation<sup>a</sup></th>
|
|
<td headers="r22 r39 r41 c2 c4">0.34</td>
|
|
<td headers="r22 r39 r41 c2 c5">0.17</td>
|
|
<td headers="r22 r39 r41 c3">0.04</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r42" headers="r22 r39 c1">Professional services industry</th>
|
|
<td headers="r22 r39 r42 c2 c4">0.35</td>
|
|
<td headers="r22 r39 r42 c2 c5">0.24</td>
|
|
<td headers="r22 r39 r42 c3">0.05</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="3" class="panel" id="r43">1998 (N = 2,675)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r44" headers="r43 c1">Age (years)</th>
|
|
<td headers="r43 r44 c2 c4">66.0</td>
|
|
<td headers="r43 r44 c2 c5">65.8</td>
|
|
<td headers="r43 r44 c3">66.0</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r45" headers="r43 c1">Male</th>
|
|
<td headers="r43 r45 c2 c4">0.6</td>
|
|
<td headers="r43 r45 c2 c5">0.5</td>
|
|
<td headers="r43 r45 c3">0.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r46" headers="r43 c1">White, non-Hispanic</th>
|
|
<td headers="r43 r46 c2 c4">0.8</td>
|
|
<td headers="r43 r46 c2 c5">0.7</td>
|
|
<td headers="r43 r46 c3">0.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r47" headers="r43 c1">Education (16 years or more)</th>
|
|
<td headers="r43 r47 c2 c4">0.33</td>
|
|
<td headers="r43 r47 c2 c5">0.13</td>
|
|
<td headers="r43 r47 c3">0.13</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r48" headers="r43 c1">Work-limiting health</th>
|
|
<td headers="r43 r48 c2 c4">0.09</td>
|
|
<td headers="r43 r48 c2 c5">0.16</td>
|
|
<td headers="r43 r48 c3">0.27</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r49" headers="r43 c1">Medical expenditures (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r50" headers="r43 r49 c1">Mean</th>
|
|
<td headers="r43 r49 r50 c2 c4">1.2</td>
|
|
<td headers="r43 r49 r50 c2 c5">1.3</td>
|
|
<td headers="r43 r49 r50 c3">1.2</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r51" headers="r43 r49 c1">Median</th>
|
|
<td headers="r43 r49 r51 c2 c4">0.6</td>
|
|
<td headers="r43 r49 r51 c2 c5">0.7</td>
|
|
<td headers="r43 r49 r51 c3">0.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r52" headers="r43 c1">Net worth (tens of thousands of dollars)<sup>b</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r53" headers="r43 r52 c1">Mean</th>
|
|
<td headers="r43 r52 r53 c2 c4">111.7</td>
|
|
<td headers="r43 r52 r53 c2 c5">43.4</td>
|
|
<td headers="r43 r52 r53 c3">24.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r54" headers="r43 r52 c1">Median</th>
|
|
<td headers="r43 r52 r54 c2 c4">22.6</td>
|
|
<td headers="r43 r52 r54 c2 c5">12.2</td>
|
|
<td headers="r43 r52 r54 c3">11.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r55" headers="r43 c1">Family income (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r56" headers="r43 r55 c1">Mean</th>
|
|
<td headers="r43 r55 r56 c2 c4">73.4</td>
|
|
<td headers="r43 r55 r56 c2 c5">34.5</td>
|
|
<td headers="r43 r55 r56 c3">32.3</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r57" headers="r43 r55 c1">Median</th>
|
|
<td headers="r43 r55 r57 c2 c4">54.9</td>
|
|
<td headers="r43 r55 r57 c2 c5">29.7</td>
|
|
<td headers="r43 r55 r57 c3">26.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r58" headers="r43 r55 c1">Per capita</th>
|
|
<td headers="r43 r55 r58 c2 c4">18.3</td>
|
|
<td headers="r43 r55 r58 c2 c5">15.0</td>
|
|
<td headers="r43 r55 r58 c3">15.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r59" headers="r43 c1">Median net earnings (thousands of dollars)<sup>a</sup></th>
|
|
<td headers="r43 r59 c2 c4">14.6</td>
|
|
<td headers="r43 r59 c2 c5">12.8</td>
|
|
<td headers="r43 r59 c3">13.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r60" headers="r43 c1">Occupation</th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r61" headers="r43 r60 c1">Self-employed</th>
|
|
<td headers="r43 r60 r61 c2 c4">0.48</td>
|
|
<td headers="r43 r60 r61 c2 c5">0.52</td>
|
|
<td headers="r43 r60 r61 c3">0.31</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r62" headers="r43 r60 c1">Professional occupation<sup>a</sup></th>
|
|
<td headers="r43 r60 r62 c2 c4">0.38</td>
|
|
<td headers="r43 r60 r62 c2 c5">0.16</td>
|
|
<td headers="r43 r60 r62 c3">0.06</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r63" headers="r43 r60 c1">Professional services industry</th>
|
|
<td headers="r43 r60 r63 c2 c4">0.37</td>
|
|
<td headers="r43 r60 r63 c2 c5">0.24</td>
|
|
<td headers="r43 r60 r63 c3">0.07</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="3" class="panel" id="r64">1999 (N = 2,619)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r65" headers="r64 c1">Age (years)</th>
|
|
<td headers="r64 r65 c2 c4">64.9</td>
|
|
<td headers="r64 r65 c2 c5">64.9</td>
|
|
<td headers="r64 r65 c3">65.1</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r66" headers="r64 c1">Male</th>
|
|
<td headers="r64 r66 c2 c4">0.6</td>
|
|
<td headers="r64 r66 c2 c5">0.5</td>
|
|
<td headers="r64 r66 c3">0.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r67" headers="r64 c1">White, non-Hispanic</th>
|
|
<td headers="r64 r67 c2 c4">0.7</td>
|
|
<td headers="r64 r67 c2 c5">0.7</td>
|
|
<td headers="r64 r67 c3">0.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r68" headers="r64 c1">Education (16 years or more)</th>
|
|
<td headers="r64 r68 c2 c4">0.28</td>
|
|
<td headers="r64 r68 c2 c5">0.16</td>
|
|
<td headers="r64 r68 c3">0.13</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r69" headers="r64 c1">Work-limiting health</th>
|
|
<td headers="r64 r69 c2 c4">0.06</td>
|
|
<td headers="r64 r69 c2 c5">0.13</td>
|
|
<td headers="r64 r69 c3">0.25</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r70" headers="r64 c1">Medical expenditures (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r71" headers="r64 r70 c1">Mean</th>
|
|
<td headers="r64 r70 r71 c2 c4">1.3</td>
|
|
<td headers="r64 r70 r71 c2 c5">1.3</td>
|
|
<td headers="r64 r70 r71 c3">1.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r72" headers="r64 r70 c1">Median</th>
|
|
<td headers="r64 r70 r72 c2 c4">0.7</td>
|
|
<td headers="r64 r70 r72 c2 c5">0.7</td>
|
|
<td headers="r64 r70 r72 c3">0.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r73" headers="r64 c1">Net worth (tens of thousands of dollars)<sup>b</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r74" headers="r64 r73 c1">Mean</th>
|
|
<td headers="r64 r73 r74 c2 c4">121.6</td>
|
|
<td headers="r64 r73 r74 c2 c5">48.2</td>
|
|
<td headers="r64 r73 r74 c3">32.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r75" headers="r64 r73 c1">Median</th>
|
|
<td headers="r64 r73 r75 c2 c4">24.1</td>
|
|
<td headers="r64 r73 r75 c2 c5">13.6</td>
|
|
<td headers="r64 r73 r75 c3">11.6</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r76" headers="r64 c1">Family income (thousands of dollars)<sup>a</sup></th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r77" headers="r64 r76 c1">Mean</th>
|
|
<td headers="r64 r76 r77 c2 c4">77.3</td>
|
|
<td headers="r64 r76 r77 c2 c5">40.3</td>
|
|
<td headers="r64 r76 r77 c3">32.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r78" headers="r64 r76 c1">Median</th>
|
|
<td headers="r64 r76 r78 c2 c4">55.7</td>
|
|
<td headers="r64 r76 r78 c2 c5">31.9</td>
|
|
<td headers="r64 r76 r78 c3">27.0</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r79" headers="r64 r76 c1">Per capita</th>
|
|
<td headers="r64 r76 r79 c2 c4">17.9</td>
|
|
<td headers="r64 r76 r79 c2 c5">17.1</td>
|
|
<td headers="r64 r76 r79 c3">15.8</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r80" headers="r64 c1">Median net earnings (thousands of dollars)<sup>a</sup></th>
|
|
<td headers="r64 r80 c2 c4">13.4</td>
|
|
<td headers="r64 r80 c2 c5">13.7</td>
|
|
<td headers="r64 r80 c3">13.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r81" headers="r64 c1">Occupation</th>
|
|
<td colspan="3"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r82" headers="r64 r81 c1">Self-employed</th>
|
|
<td headers="r64 r81 r82 c2 c4">0.56</td>
|
|
<td headers="r64 r81 r82 c2 c5">0.49</td>
|
|
<td headers="r64 r81 r82 c3">0.31</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r83" headers="r64 r81 c1">Professional occupation<sup>a</sup></th>
|
|
<td headers="r64 r81 r83 c2 c4">0.38</td>
|
|
<td headers="r64 r81 r83 c2 c5">0.16</td>
|
|
<td headers="r64 r81 r83 c3">0.06</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r84" headers="r64 r81 c1">Professional services industry</th>
|
|
<td headers="r64 r81 r84 c2 c4">0.36</td>
|
|
<td headers="r64 r81 r84 c2 c5">0.21</td>
|
|
<td headers="r64 r81 r84 c3">0.08</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="4">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation core files 1 through 12, topical modules 3, 6, 9, and 12, matched with the Social Security Administration's Master Beneficiary Record and Supplemental Earnings Record files.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="4">NOTES: Includes both primary and auxiliary beneficiaries whose benefit entitlements were met as of December 31 of the previous year.
|
|
<div class="newNote">RET = retirement earnings test.</div>
|
|
</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="4">a. 1980 Census of Population Occupation Classification System codes <span class="nobr">001–199.</span></td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="4">b. 1980 Census of Population Industry Classification System codes <span class="nobr">810–932.</span></td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<h2>Effects of the RET Removal on Earnings and Labor Force Participation</h2>
|
|
<p>The effects of the RET removal may be different for individuals who were OASDI beneficiaries at the time of the removal and for those who were not. Although the RET removal may affect the work efforts of beneficiaries directly through income and substitution effects, its effect on nonbeneficiaries appears to be more complicated, particularly for those with earnings above the RET threshold.<sup><a href="#mn19" id="mt19">19</a></sup> If removing the RET increases benefit applications, it affects the work efforts of individuals who are induced to apply for benefits. An income effect may reduce the work efforts of these "induced beneficiaries." The work efforts of the rest of the nonbeneficiaries may not be affected by the removal of the RET.</p>
|
|
<p>Measuring the effect (mostly through the income effect) of the RET removal on the work effort of beneficiaries who were induced to apply is empirically difficult. The reason is that although the data provide exact dates of OASDI benefit eligibility and application, there are only annual summary earnings data. For the year of benefit entitlement (2000), earnings generated before an entitlement (application) cannot be distinguished from earnings generated afterward. Further, the number of induced beneficiaries appears to be small in these data.<sup><a href="#mn20" id="mt20">20</a></sup> Hence, this analysis is limited to the work efforts of individuals aged <span class="nobr">65–69</span> who were OASDI beneficiaries before the RET removal; it excludes induced beneficiaries.</p>
|
|
<h3>Constructing Comparison Groups</h3>
|
|
<p>The most frequently used empirical design in non-experimental studies that use an experimental approach is difference-in-differences (see, for example, Card and Krueger 1994). Outcomes in these kinds of studies depend on the choice of comparison groups and on model specifications (LaLonde 1986). The difference-in-differences estimator requires that the mean (or other measure) change in outcome in the absence of the treatment is the same for both the treated and the nontreated groups. Comparison groups can be constructed on the basis of individuals' ages, but age-specific time trends also must be checked. In other words, earnings and labor force participation are functions of the passage of time (aging), and different age groups have their own time trends due to possible interactions between group- and time-specific effects on outcome. These age-specific time trends can cause differences across groups in the mean (or other measure) change in outcome in the absence of the treatment, which violates the assumption in this kind of model.</p>
|
|
<p>Thus, the present study uses comparison groups consisting of individuals who are the same age as the affected group—beneficiaries aged <span class="nobr">65–69</span> in each year 1996–1999. But the effects may not be appropriately measured by a simple difference estimate that can be obtained from the difference between labor force outcomes of those aged <span class="nobr">65–69</span> in 2000 and outcomes of those comparison groups. To control the time-specific effects of macroeconomic variations in the period before and after the RET change, this study includes additional comparison groups aged <span class="nobr">62–64</span> and <span class="nobr">70–72</span> in each of those periods (1996–1999 and 2000) and measures the relative effects after neutralizing time-specific factors other than the change in the earnings test.</p>
|
|
<h3>Descriptive Analysis</h3>
|
|
<p>According to economic theory, the kink in the budget constraint created by the earnings test affects an individual's labor supply behavior. Thus, observed clustering just below the kink amount provides simple evidence of labor supply reactions to the RET removal. Although this clustering may not be useful in describing effects on aggregate labor supply, it shows the labor supply reactions of individuals with earnings around the earnings test threshold.</p>
|
|
<p>Chart 1 shows the percentage distribution of earnings in $1,000 intervals relative to the threshold for individuals aged <span class="nobr">62–64</span>, <span class="nobr">65–69</span>, and <span class="nobr">70–72</span> in 1998, 1999, and 2000. Since the RET was in effect through 1999 for those aged <span class="nobr">65–69</span>, we expect to see clustering just below the annual RET thresholds in those groups only. Clustering exists just below annual thresholds in 1998 and 1999 but not in 2000, when the earnings distribution is more evenly spread. This supports the hypothesis that individuals react to the RET by holding down their labor supply (or earnings) during the RET's existence. These clustering results are consistent with those in Friedberg (2000).</p>
|
|
<div class="chartCenter">
|
|
<div class="chart700" id="chart1">
|
|
<div class="title">Chart 1.<br>Distribution of earnings for individuals aged <span class="nobr">62–64,</span> <span class="nobr">65–69,</span> and <span class="nobr">70–72</span> in 1998, 1999, and 2000</div>
|
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<div class="scrollChart"><img src="v65n1p1c1.gif" alt="Three bar charts with tabular version below." width="674" height="813" /></div>
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<div class="table altTable"><a class="altToggle" href="">Show as table</a>
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<table>
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<caption><span class="tableNumber">Table equivalent for Chart 1. </span>Distribution of earnings for individuals aged <span class="nobr">62–64,</span> <span class="nobr">65–69,</span> and <span class="nobr">70–72</span> in 1998, 1999, and 2000</caption>
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<colgroup span="1" style="width:12em"></colgroup>
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<colgroup span="3" style="width:6em"></colgroup>
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<colgroup span="3" style="width:6em"></colgroup>
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<colgroup span="3" style="width:6em"></colgroup>
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<thead>
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<tr>
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<th rowspan="2" class="stubHeading" scope="colgroup">Earnings interval relative to threshold (in thousands of dollars)</th>
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<th colspan="3" class="spanner" scope="colgroup">1998</th>
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<th colspan="3" class="spanner" scope="colgroup">1999</th>
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<th colspan="3" class="spanner" scope="colgroup">2000 <sup>a</sup></th>
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</tr>
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<tr>
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<th scope="col">Aged <span class="nobr">62–64</span></th>
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<th scope="col">Aged <span class="nobr">65–69</span></th>
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<th scope="col">Aged <span class="nobr">70–72</span></th>
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<th scope="col">Aged <span class="nobr">62–64</span></th>
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<th scope="col">Aged <span class="nobr">65–69</span></th>
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<th scope="col">Aged <span class="nobr">70–72</span></th>
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<th scope="col">Aged <span class="nobr">62–64</span></th>
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<th scope="col">Aged <span class="nobr">65–69</span></th>
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<th scope="col">Aged <span class="nobr">70–72</span></th>
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</tr>
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</thead>
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<tbody>
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<tr>
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<th class="stub0" scope="row">-5 to -4</th>
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<td>4.31</td>
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<td>2.99</td>
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<td>3.13</td>
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<td>3.34</td>
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<td>3.63</td>
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<td>3.15</td>
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<td>3.04</td>
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<td>3.09</td>
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<td>1.52</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">-4 to -3</th>
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<td>2.43</td>
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<td>3.13</td>
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<td>2.43</td>
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<td>2.79</td>
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<td>3.23</td>
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<td>2.21</td>
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<td>2.49</td>
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<td>2.57</td>
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<td>3.03</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">-3 to -2</th>
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<td>2.16</td>
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<td>4.08</td>
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<td>2.08</td>
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<td>1.39</td>
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<td>2.82</td>
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<td>1.26</td>
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<td>1.93</td>
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<td>2.32</td>
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<td>3.03</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">-2 to -1</th>
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<td>1.35</td>
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<td>2.31</td>
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<td>2.43</td>
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<td>2.51</td>
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<td>2.55</td>
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<td>2.52</td>
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<td>0.83</td>
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<td>2.06</td>
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<td>1.21</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">-1 to threshold</th>
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<td>1.35</td>
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<td>3.81</td>
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<td>1.39</td>
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<td>0.56</td>
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<td>4.30</td>
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<td>2.21</td>
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<td>2.21</td>
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<td>1.80</td>
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<td>1.52</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">Threshold to +1</th>
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<td>0.81</td>
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<td>2.31</td>
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<td>1.74</td>
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<td>0.56</td>
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<td>1.75</td>
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<td>1.58</td>
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<td>0.28</td>
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<td>2.70</td>
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<td>0.61</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">+1 to +2</th>
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<td>0.81</td>
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<td>1.36</td>
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<td>1.39</td>
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<td>0.56</td>
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<td>1.21</td>
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<td>0.32</td>
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<td>0.55</td>
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<td>1.54</td>
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<td>0.30</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">+2 to + 3</th>
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<td>0.00</td>
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<td>1.22</td>
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<td>0.69</td>
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<td>0.56</td>
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<td>0.94</td>
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<td>1.58</td>
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<td>1.10</td>
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<td>1.80</td>
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<td>0.91</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">+3 to +4</th>
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<td>1.89</td>
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<td>0.82</td>
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<td>1.04</td>
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<td>0.56</td>
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<td>1.34</td>
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<td>0.63</td>
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<td>0.28</td>
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<td>2.32</td>
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<td>0.30</td>
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</tr>
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<tr>
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<th class="stub0" scope="row">+4 to +5</th>
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<td>0.81</td>
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<td>0.54</td>
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<td>0.35</td>
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<td>0.56</td>
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<td>0.27</td>
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<td>0.63</td>
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<td>0.28</td>
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<td>0.77</td>
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<td>1.82</td>
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</tr>
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</tbody>
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<tfoot>
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<tr>
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<td class="noNotes" colspan="10"> </td>
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</tr>
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</tfoot>
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</table>
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</div>
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<div class="firstNote">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation matched with the Social Security Administration's Master Beneficiary Record and Supplemental Earnings Record files.</div>
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<div class="lastNote">a. For illustrative purposes, this analysis uses $16,500 for the retirement earnings test threshold in 2000.</div>
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</div>
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</div>
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<p>The effects of the RET removal on both the employment rate and the earnings distribution are shown in Table 3 using comparison groups. While the effects on the employment rate are barely observable, the effects on earnings can be detected in the median earnings. For example, between 1999 and 2000 the median earnings for workers aged <span class="nobr">65–69</span> increased by $995. During the same period, the median (50th percentile) earnings increased by only $442 for those aged <span class="nobr">62–64</span> and declined by $280 for workers aged <span class="nobr">70–72</span>. The 75th percentile 2000 earnings, compared with 1999 earnings, for those aged <span class="nobr">65–69</span> increased by $2,613; but for those aged <span class="nobr">62–64</span>, it increased by only $967, and it decreased by $807 for the <span class="nobr">70–72</span> age group. The significant relative gain in 2000 by those aged <span class="nobr">65–69</span> is obvious.</p>
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<div class="table" id="table3">
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<table>
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<caption><span class="tableNumber">Table 3. </span>Earnings distributions of working <abbr class="spell">OASDI</abbr> beneficiaries, by age, <span class="nobr">1996–2000</span></caption>
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<colgroup span="1" style="width:16em"></colgroup>
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<colgroup span="9" style="width:5em"></colgroup>
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<thead>
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<tr>
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<th rowspan="2" class="stubHeading" id="c1">Characteristic</th>
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<th colspan="5" class="spanner" id="c2">Level</th>
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<th colspan="4" class="spanner" id="c3">Change</th>
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</tr>
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<tr>
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<th id="c4" headers="c2">1996</th>
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<th id="c5" headers="c2">1997</th>
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<th id="c6" headers="c2">1998</th>
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<th id="c7" headers="c2">1999</th>
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<th id="c8" headers="c2">2000</th>
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<th id="c9" headers="c3"><span class="nobr">1996–2000</span></th>
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<th id="c10" headers="c3"><span class="nobr">1997–2000</span></th>
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<th id="c11" headers="c3"><span class="nobr">1998–2000</span></th>
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<th id="c12" headers="c3"><span class="nobr">1999–2000</span></th>
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</tr>
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</thead>
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<tbody>
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<tr>
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<td> </td>
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<th colspan="9" class="panel" id="r1">Aged <span class="nobr">62–64</span> in each year</th>
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</tr>
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<tr>
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<th class="stub2" id="r2" headers="r1 c1">Total in sample</th>
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<td headers="r1 r2 c2 c4">1,135</td>
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<td headers="r1 r2 c2 c5">1,134</td>
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<td headers="r1 r2 c2 c6">1,145</td>
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<td headers="r1 r2 c2 c7">1,142</td>
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<td headers="r1 r2 c2 c8">1,166</td>
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<td headers="r1 r2 c3 c9">. . .</td>
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<td headers="r1 r2 c3 c10">. . .</td>
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<td headers="r1 r2 c3 c11">. . .</td>
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<td headers="r1 r2 c3 c12">. . .</td>
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</tr>
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<tr>
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<th class="stub0" id="r3" headers="r1 c1">All employed</th>
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<td colspan="9"></td>
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</tr>
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<tr>
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<th class="stub1" id="r4" headers="r1 r3 c1">Number</th>
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<td headers="r1 r3 r4 c2 c4">314</td>
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<td headers="r1 r3 r4 c2 c5">337</td>
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<td headers="r1 r3 r4 c2 c6">371</td>
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<td headers="r1 r3 r4 c2 c7">359</td>
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<td headers="r1 r3 r4 c2 c8">362</td>
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<td headers="r1 r3 r4 c3 c9">. . .</td>
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<td headers="r1 r3 r4 c3 c10">. . .</td>
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<td headers="r1 r3 r4 c3 c11">. . .</td>
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<td headers="r1 r3 r4 c3 c12">. . .</td>
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</tr>
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<tr>
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<th class="stub1" id="r5" headers="r1 r3 c1">Percentage of total</th>
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<td headers="r1 r3 r5 c2 c4">27.7</td>
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<td headers="r1 r3 r5 c2 c5">29.7</td>
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<td headers="r1 r3 r5 c2 c6">32.4</td>
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<td headers="r1 r3 r5 c2 c7">31.4</td>
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<td headers="r1 r3 r5 c2 c8">31.1</td>
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<td headers="r1 r3 r5 c3 c9">3.4</td>
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<td headers="r1 r3 r5 c3 c10">1.3</td>
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<td headers="r1 r3 r5 c3 c11">-1.4</td>
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<td headers="r1 r3 r5 c3 c12">-0.4</td>
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</tr>
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<tr>
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<th class="stub0" id="r6" headers="r1 c1">Earnings (dollars)</th>
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<td colspan="9"></td>
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</tr>
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<tr>
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<th class="stub1" id="r7" headers="r1 r6 c1">Mean</th>
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<td headers="r1 r6 r7 c2 c4">6,193</td>
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<td headers="r1 r6 r7 c2 c5">6,635</td>
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<td headers="r1 r6 r7 c2 c6">6,974</td>
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<td headers="r1 r6 r7 c2 c7">7,189</td>
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<td headers="r1 r6 r7 c2 c8">7,813</td>
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<td headers="r1 r6 r7 c3 c9">1,620</td>
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<td headers="r1 r6 r7 c3 c10">1,178</td>
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<td headers="r1 r6 r7 c3 c11">839</td>
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<td headers="r1 r6 r7 c3 c12">624</td>
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</tr>
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<tr>
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<th class="stub1" id="r8" headers="r1 r6 c1">Standard deviation</th>
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<td headers="r1 r6 r8 c2 c4">7,604</td>
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<td headers="r1 r6 r8 c2 c5">7,799</td>
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<td headers="r1 r6 r8 c2 c6">8,412</td>
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<td headers="r1 r6 r8 c2 c7">8,392</td>
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<td headers="r1 r6 r8 c2 c8">9,309</td>
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<td headers="r1 r6 r8 c3 c9">. . .</td>
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<td headers="r1 r6 r8 c3 c10">. . .</td>
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<td headers="r1 r6 r8 c3 c11">. . .</td>
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<td headers="r1 r6 r8 c3 c12">. . .</td>
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</tr>
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<tr>
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<th class="stub1" id="r9" headers="r1 r6 c1">100th percentile</th>
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<td headers="r1 r6 r9 c2 c4">62,700</td>
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<td headers="r1 r6 r9 c2 c5">64,007</td>
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<td headers="r1 r6 r9 c2 c6">68,400</td>
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<td headers="r1 r6 r9 c2 c7">70,603</td>
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<td headers="r1 r6 r9 c2 c8">76,200</td>
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<td headers="r1 r6 r9 c3 c9">. . .</td>
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<td headers="r1 r6 r9 c3 c10">. . .</td>
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<td headers="r1 r6 r9 c3 c11">. . .</td>
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<td headers="r1 r6 r9 c3 c12">. . .</td>
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</tr>
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<tr>
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<th class="stub1" id="r10" headers="r1 r6 c1">90th percentile</th>
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<td headers="r1 r6 r10 c2 c4">11,863</td>
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<td headers="r1 r6 r10 c2 c5">13,694</td>
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<td headers="r1 r6 r10 c2 c6">13,720</td>
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<td headers="r1 r6 r10 c2 c7">14,264</td>
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<td headers="r1 r6 r10 c2 c8">16,154</td>
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<td headers="r1 r6 r10 c3 c9">4,291</td>
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<td headers="r1 r6 r10 c3 c10">2,460</td>
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<td headers="r1 r6 r10 c3 c11">2,434</td>
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<td headers="r1 r6 r10 c3 c12">1,890</td>
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</tr>
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<tr>
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<th class="stub1" id="r11" headers="r1 r6 c1">75th percentile</th>
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<td headers="r1 r6 r11 c2 c4">8,141</td>
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<td headers="r1 r6 r11 c2 c5">8,454</td>
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<td headers="r1 r6 r11 c2 c6">9,012</td>
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<td headers="r1 r6 r11 c2 c7">9,571</td>
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<td headers="r1 r6 r11 c2 c8">10,538</td>
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<td headers="r1 r6 r11 c3 c9">2,397</td>
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<td headers="r1 r6 r11 c3 c10">2,084</td>
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<td headers="r1 r6 r11 c3 c11">1,526</td>
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<td headers="r1 r6 r11 c3 c12">967</td>
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</tr>
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<tr>
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<th class="stub1" id="r12" headers="r1 r6 c1">50th percentile (median)</th>
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<td headers="r1 r6 r12 c2 c4">4,772</td>
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<td headers="r1 r6 r12 c2 c5">4,979</td>
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<td headers="r1 r6 r12 c2 c6">5,141</td>
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<td headers="r1 r6 r12 c2 c7">5,572</td>
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<td headers="r1 r6 r12 c2 c8">6,014</td>
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<td headers="r1 r6 r12 c3 c9">1,242</td>
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<td headers="r1 r6 r12 c3 c10">1,035</td>
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<td headers="r1 r6 r12 c3 c11">873</td>
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<td headers="r1 r6 r12 c3 c12">442</td>
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</tr>
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<tr>
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<th class="stub1" id="r13" headers="r1 r6 c1">25th percentile</th>
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<td headers="r1 r6 r13 c2 c4">1,294</td>
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<td headers="r1 r6 r13 c2 c5">1,499</td>
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<td headers="r1 r6 r13 c2 c6">1,492</td>
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<td headers="r1 r6 r13 c2 c7">1,374</td>
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<td headers="r1 r6 r13 c2 c8">1,564</td>
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<td headers="r1 r6 r13 c3 c9">270</td>
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<td headers="r1 r6 r13 c3 c10">65</td>
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<td headers="r1 r6 r13 c3 c11">72</td>
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<td headers="r1 r6 r13 c3 c12">190</td>
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</tr>
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<tr>
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<th class="stub0" id="r14" headers="r1 c1">Number employed</th>
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<td headers="r1 r14 c2 c4">739</td>
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<td headers="r1 r14 c2 c5">750</td>
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<td headers="r1 r14 c2 c6">812</td>
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<td headers="r1 r14 c2 c7">826</td>
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<td headers="r1 r14 c2 c8">813</td>
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<td headers="r1 r14 c3 c9">. . .</td>
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<td headers="r1 r14 c3 c10">. . .</td>
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<td headers="r1 r14 c3 c11">. . .</td>
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<td headers="r1 r14 c3 c12">. . .</td>
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</tr>
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<tr>
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<th class="stub0" id="r15" headers="r1 c1">Mean earnings (dollars)</th>
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<td headers="r1 r15 c2 c4">16,590</td>
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<td headers="r1 r15 c2 c5">16,930</td>
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<td headers="r1 r15 c2 c6">19,311</td>
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<td headers="r1 r15 c2 c7">20,344</td>
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<td headers="r1 r15 c2 c8">22,236</td>
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<td headers="r1 r15 c3 c9">. . .</td>
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<td headers="r1 r15 c3 c10">. . .</td>
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<td headers="r1 r15 c3 c11">. . .</td>
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<td headers="r1 r15 c3 c12">. . .</td>
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</tr>
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<tr>
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<td> </td>
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<th colspan="9" class="panel" id="r16">Aged <span class="nobr">65–69</span> in each year</th>
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</tr>
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<tr>
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<th class="stub2" id="r17" headers="r16 c1">Total in sample</th>
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<td headers="r16 r17 c2 c4">2,704</td>
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<td headers="r16 r17 c2 c5">2,666</td>
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<td headers="r16 r17 c2 c6">2,640</td>
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<td headers="r16 r17 c2 c7">2,582</td>
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<td headers="r16 r17 c2 c8">2,616</td>
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<td headers="r16 r17 c3 c9">. . .</td>
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<td headers="r16 r17 c3 c10">. . .</td>
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<td headers="r16 r17 c3 c11">. . .</td>
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<td headers="r16 r17 c3 c12">. . .</td>
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</tr>
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<tr>
|
|
<th class="stub0" id="r18" headers="r16 c1">All employed</th>
|
|
<td colspan="9"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r19" headers="r16 r18 c1">Number</th>
|
|
<td headers="r16 r18 r19 c2 c4">708</td>
|
|
<td headers="r16 r18 r19 c2 c5">735</td>
|
|
<td headers="r16 r18 r19 c2 c6">735</td>
|
|
<td headers="r16 r18 r19 c2 c7">744</td>
|
|
<td headers="r16 r18 r19 c2 c8">777</td>
|
|
<td headers="r16 r18 r19 c3 c9">. . .</td>
|
|
<td headers="r16 r18 r19 c3 c10">. . .</td>
|
|
<td headers="r16 r18 r19 c3 c11">. . .</td>
|
|
<td headers="r16 r18 r19 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r20" headers="r16 r18 c1">Percentage of total</th>
|
|
<td headers="r16 r18 r20 c2 c4">26.2</td>
|
|
<td headers="r16 r18 r20 c2 c5">27.6</td>
|
|
<td headers="r16 r18 r20 c2 c6">27.8</td>
|
|
<td headers="r16 r18 r20 c2 c7">28.8</td>
|
|
<td headers="r16 r18 r20 c2 c8">29.7</td>
|
|
<td headers="r16 r18 r20 c3 c9">3.5</td>
|
|
<td headers="r16 r18 r20 c3 c10">2.1</td>
|
|
<td headers="r16 r18 r20 c3 c11">1.9</td>
|
|
<td headers="r16 r18 r20 c3 c12">0.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r21" headers="r16 c1">Earnings (dollars)</th>
|
|
<td colspan="9"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r22" headers="r16 r21 c1">Mean</th>
|
|
<td headers="r16 r21 r22 c2 c4">10,782</td>
|
|
<td headers="r16 r21 r22 c2 c5">10,753</td>
|
|
<td headers="r16 r21 r22 c2 c6">11,491</td>
|
|
<td headers="r16 r21 r22 c2 c7">11,434</td>
|
|
<td headers="r16 r21 r22 c2 c8">12,522</td>
|
|
<td headers="r16 r21 r22 c3 c9">1,740</td>
|
|
<td headers="r16 r21 r22 c3 c10">1,769</td>
|
|
<td headers="r16 r21 r22 c3 c11">1,031</td>
|
|
<td headers="r16 r21 r22 c3 c12">1,088</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r23" headers="r16 r21 c1">Standard deviation</th>
|
|
<td headers="r16 r21 r23 c2 c4">14,111</td>
|
|
<td headers="r16 r21 r23 c2 c5">14,454</td>
|
|
<td headers="r16 r21 r23 c2 c6">15,052</td>
|
|
<td headers="r16 r21 r23 c2 c7">15,026</td>
|
|
<td headers="r16 r21 r23 c2 c8">15,119</td>
|
|
<td headers="r16 r21 r23 c3 c9">. . .</td>
|
|
<td headers="r16 r21 r23 c3 c10">. . .</td>
|
|
<td headers="r16 r21 r23 c3 c11">. . .</td>
|
|
<td headers="r16 r21 r23 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r24" headers="r16 r21 c1">100th percentile</th>
|
|
<td headers="r16 r21 r24 c2 c4">62,700</td>
|
|
<td headers="r16 r21 r24 c2 c5">65,400</td>
|
|
<td headers="r16 r21 r24 c2 c6">68,400</td>
|
|
<td headers="r16 r21 r24 c2 c7">72,600</td>
|
|
<td headers="r16 r21 r24 c2 c8">76,200</td>
|
|
<td headers="r16 r21 r24 c3 c9">. . .</td>
|
|
<td headers="r16 r21 r24 c3 c10">. . .</td>
|
|
<td headers="r16 r21 r24 c3 c11">. . .</td>
|
|
<td headers="r16 r21 r24 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r25" headers="r16 r21 c1">90th percentile</th>
|
|
<td headers="r16 r21 r25 c2 c4">27,375</td>
|
|
<td headers="r16 r21 r25 c2 c5">23,539</td>
|
|
<td headers="r16 r21 r25 c2 c6">28,225</td>
|
|
<td headers="r16 r21 r25 c2 c7">26,064</td>
|
|
<td headers="r16 r21 r25 c2 c8">30,532</td>
|
|
<td headers="r16 r21 r25 c3 c9">3,157</td>
|
|
<td headers="r16 r21 r25 c3 c10">6,993</td>
|
|
<td headers="r16 r21 r25 c3 c11">2,307</td>
|
|
<td headers="r16 r21 r25 c3 c12">4,468</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r26" headers="r16 r21 c1">75th percentile</th>
|
|
<td headers="r16 r21 r26 c2 c4">11,765</td>
|
|
<td headers="r16 r21 r26 c2 c5">12,128</td>
|
|
<td headers="r16 r21 r26 c2 c6">13,385</td>
|
|
<td headers="r16 r21 r26 c2 c7">13,764</td>
|
|
<td headers="r16 r21 r26 c2 c8">16,377</td>
|
|
<td headers="r16 r21 r26 c3 c9">4,612</td>
|
|
<td headers="r16 r21 r26 c3 c10">4,249</td>
|
|
<td headers="r16 r21 r26 c3 c11">2,992</td>
|
|
<td headers="r16 r21 r26 c3 c12">2,613</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r27" headers="r16 r21 c1">50th percentile (median)</th>
|
|
<td headers="r16 r21 r27 c2 c4">6,344</td>
|
|
<td headers="r16 r21 r27 c2 c5">6,207</td>
|
|
<td headers="r16 r21 r27 c2 c6">6,940</td>
|
|
<td headers="r16 r21 r27 c2 c7">6,904</td>
|
|
<td headers="r16 r21 r27 c2 c8">7,899</td>
|
|
<td headers="r16 r21 r27 c3 c9">1,555</td>
|
|
<td headers="r16 r21 r27 c3 c10">1,692</td>
|
|
<td headers="r16 r21 r27 c3 c11">959</td>
|
|
<td headers="r16 r21 r27 c3 c12">995</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r28" headers="r16 r21 c1">25th percentile</th>
|
|
<td headers="r16 r21 r28 c2 c4">2,480</td>
|
|
<td headers="r16 r21 r28 c2 c5">2,203</td>
|
|
<td headers="r16 r21 r28 c2 c6">2,310</td>
|
|
<td headers="r16 r21 r28 c2 c7">2,252</td>
|
|
<td headers="r16 r21 r28 c2 c8">2,554</td>
|
|
<td headers="r16 r21 r28 c3 c9">74</td>
|
|
<td headers="r16 r21 r28 c3 c10">351</td>
|
|
<td headers="r16 r21 r28 c3 c11">244</td>
|
|
<td headers="r16 r21 r28 c3 c12">302</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r29" headers="r16 c1">Number employed</th>
|
|
<td headers="r16 r29 c2 c4">801</td>
|
|
<td headers="r16 r29 c2 c5">835</td>
|
|
<td headers="r16 r29 c2 c6">823</td>
|
|
<td headers="r16 r29 c2 c7">827</td>
|
|
<td headers="r16 r29 c2 c8">851</td>
|
|
<td headers="r16 r29 c3 c9">. . .</td>
|
|
<td headers="r16 r29 c3 c10">. . .</td>
|
|
<td headers="r16 r29 c3 c11">. . .</td>
|
|
<td headers="r16 r29 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r30" headers="r16 c1">Mean earnings (dollars)</th>
|
|
<td headers="r16 r30 c2 c4">12,393</td>
|
|
<td headers="r16 r30 c2 c5">12,439</td>
|
|
<td headers="r16 r30 c2 c6">13,209</td>
|
|
<td headers="r16 r30 c2 c7">12,785</td>
|
|
<td headers="r16 r30 c2 c8">12,973</td>
|
|
<td headers="r16 r30 c3 c9">. . .</td>
|
|
<td headers="r16 r30 c3 c10">. . .</td>
|
|
<td headers="r16 r30 c3 c11">. . .</td>
|
|
<td headers="r16 r30 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="9" class="panel" id="r31">Aged <span class="nobr">70–72</span> in each year</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub2" id="r32" headers="r31 c1">Total in sample</th>
|
|
<td headers="r31 r32 c2 c4">1,471</td>
|
|
<td headers="r31 r32 c2 c5">1,558</td>
|
|
<td headers="r31 r32 c2 c6">1,528</td>
|
|
<td headers="r31 r32 c2 c7">1,543</td>
|
|
<td headers="r31 r32 c2 c8">1,538</td>
|
|
<td headers="r31 r32 c3 c9">. . .</td>
|
|
<td headers="r31 r32 c3 c10">. . .</td>
|
|
<td headers="r31 r32 c3 c11">. . .</td>
|
|
<td headers="r31 r32 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r33" headers="r31 c1">All employed</th>
|
|
<td colspan="9"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r34" headers="r31 r33 c1">Number</th>
|
|
<td headers="r31 r33 r34 c2 c4">251</td>
|
|
<td headers="r31 r33 r34 c2 c5">290</td>
|
|
<td headers="r31 r33 r34 c2 c6">288</td>
|
|
<td headers="r31 r33 r34 c2 c7">317</td>
|
|
<td headers="r31 r33 r34 c2 c8">330</td>
|
|
<td headers="r31 r33 r34 c3 c9">. . .</td>
|
|
<td headers="r31 r33 r34 c3 c10">. . .</td>
|
|
<td headers="r31 r33 r34 c3 c11">. . .</td>
|
|
<td headers="r31 r33 r34 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r35" headers="r31 r33 c1">Percentage of total</th>
|
|
<td headers="r31 r33 r35 c2 c4">17.1</td>
|
|
<td headers="r31 r33 r35 c2 c5">18.6</td>
|
|
<td headers="r31 r33 r35 c2 c6">18.9</td>
|
|
<td headers="r31 r33 r35 c2 c7">20.5</td>
|
|
<td headers="r31 r33 r35 c2 c8">21.5</td>
|
|
<td headers="r31 r33 r35 c3 c9">4.4</td>
|
|
<td headers="r31 r33 r35 c3 c10">2.9</td>
|
|
<td headers="r31 r33 r35 c3 c11">2.6</td>
|
|
<td headers="r31 r33 r35 c3 c12">0.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r36" headers="r31 c1">Earnings (dollars)</th>
|
|
<td colspan="9"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r37" headers="r31 r36 c1">Mean</th>
|
|
<td headers="r31 r36 r37 c2 c4">10,788</td>
|
|
<td headers="r31 r36 r37 c2 c5">10,917</td>
|
|
<td headers="r31 r36 r37 c2 c6">11,185</td>
|
|
<td headers="r31 r36 r37 c2 c7">11,944</td>
|
|
<td headers="r31 r36 r37 c2 c8">11,385</td>
|
|
<td headers="r31 r36 r37 c3 c9">597</td>
|
|
<td headers="r31 r36 r37 c3 c10">468</td>
|
|
<td headers="r31 r36 r37 c3 c11">200</td>
|
|
<td headers="r31 r36 r37 c3 c12">-559</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r38" headers="r31 r36 c1">Standard deviation</th>
|
|
<td headers="r31 r36 r38 c2 c4">15,047</td>
|
|
<td headers="r31 r36 r38 c2 c5">16,098</td>
|
|
<td headers="r31 r36 r38 c2 c6">16,520</td>
|
|
<td headers="r31 r36 r38 c2 c7">16,801</td>
|
|
<td headers="r31 r36 r38 c2 c8">16,681</td>
|
|
<td headers="r31 r36 r38 c3 c9">. . .</td>
|
|
<td headers="r31 r36 r38 c3 c10">. . .</td>
|
|
<td headers="r31 r36 r38 c3 c11">. . .</td>
|
|
<td headers="r31 r36 r38 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r39" headers="r31 r36 c1">100th percentile</th>
|
|
<td headers="r31 r36 r39 c2 c4">62,700</td>
|
|
<td headers="r31 r36 r39 c2 c5">65,400</td>
|
|
<td headers="r31 r36 r39 c2 c6">68,400</td>
|
|
<td headers="r31 r36 r39 c2 c7">72,600</td>
|
|
<td headers="r31 r36 r39 c2 c8">76,200</td>
|
|
<td headers="r31 r36 r39 c3 c9">. . .</td>
|
|
<td headers="r31 r36 r39 c3 c10">. . .</td>
|
|
<td headers="r31 r36 r39 c3 c11">. . .</td>
|
|
<td headers="r31 r36 r39 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r40" headers="r31 r36 c1">90th percentile</th>
|
|
<td headers="r31 r36 r40 c2 c4">26,618</td>
|
|
<td headers="r31 r36 r40 c2 c5">29,335</td>
|
|
<td headers="r31 r36 r40 c2 c6">30,381</td>
|
|
<td headers="r31 r36 r40 c2 c7">30,519</td>
|
|
<td headers="r31 r36 r40 c2 c8">26,779</td>
|
|
<td headers="r31 r36 r40 c3 c9">161</td>
|
|
<td headers="r31 r36 r40 c3 c10">-2,556</td>
|
|
<td headers="r31 r36 r40 c3 c11">-3,602</td>
|
|
<td headers="r31 r36 r40 c3 c12">-3,740</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r41" headers="r31 r36 c1">75th percentile</th>
|
|
<td headers="r31 r36 r41 c2 c4">11,761</td>
|
|
<td headers="r31 r36 r41 c2 c5">11,324</td>
|
|
<td headers="r31 r36 r41 c2 c6">12,110</td>
|
|
<td headers="r31 r36 r41 c2 c7">13,539</td>
|
|
<td headers="r31 r36 r41 c2 c8">12,732</td>
|
|
<td headers="r31 r36 r41 c3 c9">971</td>
|
|
<td headers="r31 r36 r41 c3 c10">1,408</td>
|
|
<td headers="r31 r36 r41 c3 c11">622</td>
|
|
<td headers="r31 r36 r41 c3 c12">-807</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r42" headers="r31 r36 c1">50th percentile (median)</th>
|
|
<td headers="r31 r36 r42 c2 c4">5,328</td>
|
|
<td headers="r31 r36 r42 c2 c5">4,800</td>
|
|
<td headers="r31 r36 r42 c2 c6">4,526</td>
|
|
<td headers="r31 r36 r42 c2 c7">6,240</td>
|
|
<td headers="r31 r36 r42 c2 c8">5,960</td>
|
|
<td headers="r31 r36 r42 c3 c9">632</td>
|
|
<td headers="r31 r36 r42 c3 c10">1,160</td>
|
|
<td headers="r31 r36 r42 c3 c11">1,434</td>
|
|
<td headers="r31 r36 r42 c3 c12">-280</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r43" headers="r31 r36 c1">25th percentile</th>
|
|
<td headers="r31 r36 r43 c2 c4">1,692</td>
|
|
<td headers="r31 r36 r43 c2 c5">1,606</td>
|
|
<td headers="r31 r36 r43 c2 c6">1,475</td>
|
|
<td headers="r31 r36 r43 c2 c7">2,260</td>
|
|
<td headers="r31 r36 r43 c2 c8">1,635</td>
|
|
<td headers="r31 r36 r43 c3 c9">57</td>
|
|
<td headers="r31 r36 r43 c3 c10">29</td>
|
|
<td headers="r31 r36 r43 c3 c11">160</td>
|
|
<td headers="r31 r36 r43 c3 c12">-625</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r44" headers="r31 c1">Number employed</th>
|
|
<td headers="r31 r44 c2 c4">267</td>
|
|
<td headers="r31 r44 c2 c5">304</td>
|
|
<td headers="r31 r44 c2 c6">303</td>
|
|
<td headers="r31 r44 c2 c7">333</td>
|
|
<td headers="r31 r44 c2 c8">342</td>
|
|
<td headers="r31 r44 c3 c9">. . .</td>
|
|
<td headers="r31 r44 c3 c10">. . .</td>
|
|
<td headers="r31 r44 c3 c11">. . .</td>
|
|
<td headers="r31 r44 c3 c12">. . .</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r45" headers="r31 c1">Mean earnings (dollars)</th>
|
|
<td headers="r31 r45 c2 c4">10,827</td>
|
|
<td headers="r31 r45 c2 c5">10,923</td>
|
|
<td headers="r31 r45 c2 c6">11,410</td>
|
|
<td headers="r31 r45 c2 c7">11,708</td>
|
|
<td headers="r31 r45 c2 c8">11,219</td>
|
|
<td headers="r31 r45 c3 c9">. . .</td>
|
|
<td headers="r31 r45 c3 c10">. . .</td>
|
|
<td headers="r31 r45 c3 c11">. . .</td>
|
|
<td headers="r31 r45 c3 c12">. . .</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="10">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation (<abbr>SIPP</abbr>) matched with the Social Security Administration's Supplemental Earnings Record file.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="10">NOTES: All earnings values are in current dollars. Includes both primary and auxiliary beneficiaries whose benefit entitlements were met as of December 31 of the previous year. . . . = not applicable. </td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>Removing the RET shifts the upper middle portion of the earnings distribution of working OASDI beneficiaries aged <span class="nobr">65–69</span>. This shift suggests that some who earned less than the threshold amounts before the RET removal earned more than the threshold afterward. Table 4 shows the percentages of workers with earnings below and above the threshold. These percentages were tabulated in four different sample universes for individuals aged <span class="nobr">65–69</span> in the reference years: all individuals in the age range, those employed in at least 1 year in the most recent 5 years, those employed in at least 1 year in the most recent 2 years, and OASDI beneficiaries. If the removal of the RET affected the labor supply of that age group, we would expect to see an increase in the percentage of workers earning above the threshold relative to the percentage earning below it.</p>
|
|
<div class="table">
|
|
<table>
|
|
<caption><span class="tableNumber">Table 4. </span>Percentage of workers aged <span class="nobr">65–69</span> in <span class="nobr">1996–2000</span> who earned below or above the annual retirement earnings test maximum, <span class="nobr">1996–2000</span></caption>
|
|
<colgroup span="1" style="width:20em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th rowspan="2" class="stubHeading" scope="colgroup">Universe</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">1996</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">1997</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">1998</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">1999</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">2000<sup>a</sup></th>
|
|
</tr>
|
|
<tr>
|
|
<th scope="col">$1– $12,500</th>
|
|
<th scope="col">Above $12,500</th>
|
|
<th scope="col">$1– $13,500</th>
|
|
<th scope="col">Above $13,500</th>
|
|
<th scope="col">$1– $14,500</th>
|
|
<th scope="col">Above $14,500</th>
|
|
<th scope="col">$1– $15,500</th>
|
|
<th scope="col">Above $15,500</th>
|
|
<th scope="col">$1– $16,500</th>
|
|
<th scope="col">Above $16,500</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">All workers aged <span class="nobr">65–69</span></th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">All </th>
|
|
<td>19.2</td>
|
|
<td>6.7</td>
|
|
<td>20.6</td>
|
|
<td>6.6</td>
|
|
<td>20.5</td>
|
|
<td>6.7</td>
|
|
<td>21.9</td>
|
|
<td>6.2</td>
|
|
<td>21.2</td>
|
|
<td>7.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Male </th>
|
|
<td>24.3</td>
|
|
<td>8.4</td>
|
|
<td>26.3</td>
|
|
<td>8.2</td>
|
|
<td>25.4</td>
|
|
<td>9.0</td>
|
|
<td>26.7</td>
|
|
<td>8.7</td>
|
|
<td>25.3</td>
|
|
<td>10.9</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Worked in at least 1 year in recent 5 years</th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">All </th>
|
|
<td>34.3</td>
|
|
<td>12.5</td>
|
|
<td>37.4</td>
|
|
<td>12.4</td>
|
|
<td>37.1</td>
|
|
<td>12.7</td>
|
|
<td>39.2</td>
|
|
<td>11.6</td>
|
|
<td>38.9</td>
|
|
<td>14.2</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Male </th>
|
|
<td>36.8</td>
|
|
<td>13.2</td>
|
|
<td>39.8</td>
|
|
<td>13.0</td>
|
|
<td>38.2</td>
|
|
<td>14.0</td>
|
|
<td>39.9</td>
|
|
<td>13.6</td>
|
|
<td>39.7</td>
|
|
<td>17.5</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Worked in at least 1 year in recent 2 years</th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">All </th>
|
|
<td>49.4</td>
|
|
<td>18.4</td>
|
|
<td>53.3</td>
|
|
<td>18.1</td>
|
|
<td>52.2</td>
|
|
<td>18.5</td>
|
|
<td>54.7</td>
|
|
<td>17.0</td>
|
|
<td>52.5</td>
|
|
<td>19.7</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Male </th>
|
|
<td>52.1</td>
|
|
<td>19.4</td>
|
|
<td>56.3</td>
|
|
<td>18.5</td>
|
|
<td>51.2</td>
|
|
<td>19.4</td>
|
|
<td>54.2</td>
|
|
<td>19.1</td>
|
|
<td>52.3</td>
|
|
<td>24.0</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup"><abbr class="spell">OASDI</abbr> beneficiaries<sup>b</sup></th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">All </th>
|
|
<td>20.6</td>
|
|
<td>5.6</td>
|
|
<td>22.2</td>
|
|
<td>5.4</td>
|
|
<td>22.1</td>
|
|
<td>5.7</td>
|
|
<td>23.4</td>
|
|
<td>5.4</td>
|
|
<td>22.3</td>
|
|
<td>7.4</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Male </th>
|
|
<td>25.6</td>
|
|
<td>7.0</td>
|
|
<td>27.7</td>
|
|
<td>6.5</td>
|
|
<td>26.8</td>
|
|
<td>7.3</td>
|
|
<td>28.0</td>
|
|
<td>7.2</td>
|
|
<td>26.2</td>
|
|
<td>10.3</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="11">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation matched with the Social Security Administration's Master Beneficiary Record and Supplemental Earnings Record files.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="11">a. The threshold of $16,500 for 2000 is chosen for illustrative purposes.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="11">b. Includes both primary and auxiliary beneficiaries whose benefit entitlements were met as of December 31 of the previous year.</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>For all workers in 1996 through 1999, about 6.2 percent to 6.7 percent earned above the threshold, and 19.2 percent to 21.9 percent earned below the threshold. The percentages of workers who earned above the threshold are higher in those years for the male-only sample (8.2 percent to 9.0 percent) as well as for workers who had recent (<span class="nobr">5-year</span>) work histories (11.6 percent to 12.7 percent).</p>
|
|
<p>After the RET removal in 2000, the percentages of workers earning above the illustrative threshold ($16,500) increase noticeably.<sup><a href="#mn21" id="mt21">21</a></sup> This increase is higher among both the male-only sample and those who had recent work experience. The same tabulations using only working beneficiaries indicate that the percentages of beneficiaries who earned above the threshold, especially males and those who had recent work experience, were higher in 2000 than before the removal.</p>
|
|
<h3>Regression Analysis</h3>
|
|
<p>The descriptive analysis presented above suggests that the removal of the RET changed the shape of the earnings distribution of those affected, conditional on working, but did not significantly change employment rates. This section presents reduced-form regression estimates of both the effect on employment rates using a probit specification and the effect on the earnings distribution using percentile regressions. A percentile regression is used, rather than a mean-based regression technique, to capture the uneven effects of the RET removal across the earnings distribution (see Packard 1990 for theoretical predictions of these uneven effects). And since the distribution of annual earnings among aged persons is notoriously nonnormal, the mean change is probably not the best measure of the effect of the RET removal on earnings.</p>
|
|
<p>The regression estimates are based on the following difference-in-differences model:</p>
|
|
<div class="equation">
|
|
<math display='inline'>
|
|
<mrow>
|
|
<msubsup>
|
|
<mi>y</mi>
|
|
<mrow>
|
|
<mi>i</mi>
|
|
<mo>​</mo>
|
|
<mi>t</mi>
|
|
</mrow>
|
|
<mi>j</mi>
|
|
</msubsup>
|
|
<mo>=</mo>
|
|
<mi>a</mi>
|
|
<mo>+</mo>
|
|
<mrow>
|
|
<mi>g</mi>
|
|
<mo>⁢</mo>
|
|
<msub>
|
|
<mi>Δ</mi>
|
|
<mi>t</mi>
|
|
</msub>
|
|
</mrow>
|
|
<mo>+</mo>
|
|
<mrow>
|
|
<mi>h</mi>
|
|
<mo>⁢</mo>
|
|
<msup>
|
|
<mi>Δ</mi>
|
|
<mi>j</mi>
|
|
</msup>
|
|
</mrow>
|
|
<mo>+</mo>
|
|
<mrow>
|
|
<mi>β</mi>
|
|
<mo>⁢</mo>
|
|
<msubsup>
|
|
<mi>Δ</mi>
|
|
<mi>t</mi>
|
|
<mi>j</mi>
|
|
</msubsup>
|
|
</mrow>
|
|
<mo>+</mo>
|
|
<mrow>
|
|
<mi>c</mi>
|
|
<mo>⁢</mo>
|
|
<msub>
|
|
<mi>X</mi>
|
|
<mi>i</mi>
|
|
</msub>
|
|
</mrow>
|
|
<mo>+</mo>
|
|
<msubsup>
|
|
<mi>e</mi>
|
|
<mrow>
|
|
<mi>i</mi>
|
|
<mo>​</mo>
|
|
<mi>t</mi>
|
|
</mrow>
|
|
<mi>j</mi>
|
|
</msubsup>
|
|
</mrow>
|
|
</math>
|
|
, </div>
|
|
<p class="noindent">where <i>y</i> is annual Social Security taxable earnings or employment status, <i>X</i> is a vector of the individual's characteristics, Δs are dummy variables, index <i>j</i> = 1 for the affected group (those aged 65–69) and 0 otherwise (comparison groups), and time index <i>t</i> = 1 after the RET removal (2000) and 0 otherwise (preremoval period). Hence Δ<sub><i>t</i></sub> = 1 if <i>t</i> = 1 and 0 otherwise; Δ<sup><i>j</i></sup> = 1 if <i>j</i> = 1 and 0 otherwise; and Δ<sup><i>j</i></sup><sub><i>t</i></sub> = 1 if <i>t</i> = 1 and <i>j</i> = 1 and 0 otherwise. Thus the estimate of <i>β</i> represents the effects of the RET removal on earnings amounts or on employment rates after controlling for time and group effects. The estimate of <i>β</i> would be zero in the absence of the effects.</p>
|
|
<p>This study first estimates the effects of the RET removal on the employment rate using the above reduced form, difference-in-differences probit model. Estimated coefficients of <i>β</i> are small and statistically insignificant in the model using the controls: 0.0188 (standard error of 0.0497), indicating that the RET removal had no immediate, significant effect on the employment rate of older workers.<sup><a href="#mn22" id="mt22">22</a></sup></p>
|
|
<p>Estimates of the effect of removing the RET on earnings are shown in Table 5; comparison groups include age groups <span class="nobr">62–64</span> and <span class="nobr">70–72</span> from 1996 to 2000. The top panel shows estimates of the regression on the 25<sup>th</sup>, 50<sup>th</sup>, 65<sup>th</sup>, 75<sup>th</sup>, and 85<sup>th</sup> percentiles, including only time and group dummies as covariates. The bottom panel shows regression results from a specification including additional covariates: sex, self-employment status, education level, health status (lagged), and amounts of alternative per capita family income (lagged). Estimates of standard errors using standard methods tend to underestimate the standard error when errors are heteroscedastic (that is, when errors do not have a common variance). Hence this study reports estimates of standard errors using bootstrap resampling with 100 repetitions (Stata 1999, release 7, pp. <span class="nobr">18–20</span>). Results in the top panel of Table 5 show that removing the RET increases earnings at the 65<sup>th</sup>, 75<sup>th</sup>, and 85<sup>th</sup> percentiles by $1,443, $2,257, and $3,472, respectively. Results in the bottom panel, where the regression controls for additional individual and family characteristics, indicate that the removal increases earnings of those percentiles by $1,153, $2,366, and $2,852, respectively. According to results of the percentile regression analysis, the RET removal has a statistically significant effect on the higher percentiles of earnings.</p>
|
|
<div class="table" id="table5">
|
|
<table>
|
|
<caption><span class="tableNumber">Table 5. </span>Difference-in-differences estimates of the effect of removing the retirement earnings test on alternative comparison groups (ages <span class="nobr">62–64</span> and <span class="nobr">70–72</span>), by percentiles of annual Social Security taxable earnings, <span class="nobr">1996–2000</span></caption>
|
|
<colgroup span="1" style="width:16em"></colgroup>
|
|
<colgroup span="12" style="width:5em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th rowspan="2" class="stubHeading" id="c1">Variable</th>
|
|
<th colspan="2" class="spanner" id="c2">25th percentile</th>
|
|
<th colspan="2" class="spanner" id="c3">50th percentile</th>
|
|
<th colspan="2" class="spanner" id="c4">65th percentile</th>
|
|
<th colspan="2" class="spanner" id="c5">75th percentile</th>
|
|
<th colspan="2" class="spanner" id="c6">85th percentile</th>
|
|
<th colspan="2" class="spanner" id="c7"><abbr class="spell">OLS</abbr> standard</th>
|
|
</tr>
|
|
<tr>
|
|
<th id="c8" headers="c2">Estimate</th>
|
|
<th id="c9" headers="c2">Standard error</th>
|
|
<th id="c10" headers="c3">Estimate</th>
|
|
<th id="c11" headers="c3">Standard error</th>
|
|
<th id="c12" headers="c4">Estimate</th>
|
|
<th id="c13" headers="c4">Standard error</th>
|
|
<th id="c14" headers="c5">Estimate</th>
|
|
<th id="c15" headers="c5">Standard error</th>
|
|
<th id="c16" headers="c6">Estimate</th>
|
|
<th id="c17" headers="c6">Standard error</th>
|
|
<th id="c18" headers="c7">Estimate</th>
|
|
<th id="c19" headers="c7">Standard error</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="12" class="panel" id="r1">Estimates including time and group dummies as covariates (N = 6,918)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r2" headers="r1 c1">Constant</th>
|
|
<td headers="r1 r2 c2 c8">2.3830</td>
|
|
<td headers="r1 r2 c2 c9">0.1958</td>
|
|
<td headers="r1 r2 c3 c10">7.4215</td>
|
|
<td headers="r1 r2 c3 c11">0.4870</td>
|
|
<td headers="r1 r2 c4 c12">10.6274</td>
|
|
<td headers="r1 r2 c4 c13">0.4623</td>
|
|
<td headers="r1 r2 c5 c14">14.0800</td>
|
|
<td headers="r1 r2 c5 c15">0.5576</td>
|
|
<td headers="r1 r2 c6 c16">18.8217</td>
|
|
<td headers="r1 r2 c6 c17">1.0263</td>
|
|
<td headers="r1 r2 c7 c18">11.7551</td>
|
|
<td headers="r1 r2 c7 c19">0.6453</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r3" headers="r1 c1">Time dummy </th>
|
|
<td colspan="12"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r4" headers="r1 r3 c1">1996</th>
|
|
<td headers="r1 r3 r4 c2 c8">0.0448</td>
|
|
<td headers="r1 r3 r4 c2 c9">0.1994</td>
|
|
<td headers="r1 r3 r4 c3 c10">-1.1205</td>
|
|
<td headers="r1 r3 r4 c3 c11">0.5092</td>
|
|
<td headers="r1 r3 r4 c4 c12">-1.0794</td>
|
|
<td headers="r1 r3 r4 c4 c13">0.4820</td>
|
|
<td headers="r1 r3 r4 c5 c14">-2.1300</td>
|
|
<td headers="r1 r3 r4 c5 c15">0.5397</td>
|
|
<td headers="r1 r3 r4 c6 c16">-1.7067</td>
|
|
<td headers="r1 r3 r4 c6 c17">0.9780</td>
|
|
<td headers="r1 r3 r4 c7 c18">-1.0483</td>
|
|
<td headers="r1 r3 r4 c7 c19">0.6849</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r5" headers="r1 r3 c1">1997</th>
|
|
<td headers="r1 r3 r5 c2 c8">-0.0780</td>
|
|
<td headers="r1 r3 r5 c2 c9">0.2093</td>
|
|
<td headers="r1 r3 r5 c3 c10">-1.1785</td>
|
|
<td headers="r1 r3 r5 c3 c11">0.4959</td>
|
|
<td headers="r1 r3 r5 c4 c12">-1.0515</td>
|
|
<td headers="r1 r3 r5 c4 c13">0.5071</td>
|
|
<td headers="r1 r3 r5 c5 c14">-1.7499</td>
|
|
<td headers="r1 r3 r5 c5 c15">0.5642</td>
|
|
<td headers="r1 r3 r5 c6 c16">-2.0642</td>
|
|
<td headers="r1 r3 r5 c6 c17">1.0909</td>
|
|
<td headers="r1 r3 r5 c7 c18">-0.9270</td>
|
|
<td headers="r1 r3 r5 c7 c19">0.6757</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r6" headers="r1 r3 c1">1998</th>
|
|
<td headers="r1 r3 r6 c2 c8">-0.0770</td>
|
|
<td headers="r1 r3 r6 c2 c9">0.2028</td>
|
|
<td headers="r1 r3 r6 c3 c10">-0.7882</td>
|
|
<td headers="r1 r3 r6 c3 c11">0.5290</td>
|
|
<td headers="r1 r3 r6 c4 c12">-0.4684</td>
|
|
<td headers="r1 r3 r6 c4 c13">0.4495</td>
|
|
<td headers="r1 r3 r6 c5 c14">-1.0800</td>
|
|
<td headers="r1 r3 r6 c5 c15">0.6261</td>
|
|
<td headers="r1 r3 r6 c6 c16">-1.0449</td>
|
|
<td headers="r1 r3 r6 c6 c17">1.2221</td>
|
|
<td headers="r1 r3 r6 c7 c18">-0.3904</td>
|
|
<td headers="r1 r3 r6 c7 c19">0.6721</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r7" headers="r1 r3 c1">1999</th>
|
|
<td headers="r1 r3 r7 c2 c8">-0.0678</td>
|
|
<td headers="r1 r3 r7 c2 c9">0.2445</td>
|
|
<td headers="r1 r3 r7 c3 c10">-0.3426</td>
|
|
<td headers="r1 r3 r7 c3 c11">0.5314</td>
|
|
<td headers="r1 r3 r7 c4 c12">-0.1184</td>
|
|
<td headers="r1 r3 r7 c4 c13">0.4599</td>
|
|
<td headers="r1 r3 r7 c5 c14">-0.4563</td>
|
|
<td headers="r1 r3 r7 c5 c15">0.6200</td>
|
|
<td headers="r1 r3 r7 c6 c16">-0.6017</td>
|
|
<td headers="r1 r3 r7 c6 c17">1.0078</td>
|
|
<td headers="r1 r3 r7 c7 c18">-0.1985</td>
|
|
<td headers="r1 r3 r7 c7 c19">0.6697</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r8" headers="r1 c1">Group dummy</th>
|
|
<td colspan="12"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r9" headers="r1 r8 c1">Ages <span class="nobr">62–64</span></th>
|
|
<td headers="r1 r8 r9 c2 c8">-0.8763</td>
|
|
<td headers="r1 r8 r9 c2 c9">0.1694</td>
|
|
<td headers="r1 r8 r9 c3 c10">-1.4360</td>
|
|
<td headers="r1 r8 r9 c3 c11">0.2841</td>
|
|
<td headers="r1 r8 r9 c4 c12">-2.3070</td>
|
|
<td headers="r1 r8 r9 c4 c13">0.3155</td>
|
|
<td headers="r1 r8 r9 c5 c14">-3.8800</td>
|
|
<td headers="r1 r8 r9 c5 c15">0.2906</td>
|
|
<td headers="r1 r8 r9 c6 c16">-6.2642</td>
|
|
<td headers="r1 r8 r9 c6 c17">0.7150</td>
|
|
<td headers="r1 r8 r9 c7 c18">-4.2766</td>
|
|
<td headers="r1 r8 r9 c7 c19">0.4358</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r10" headers="r1 r8 c1">Ages <span class="nobr">70–72</span></th>
|
|
<td headers="r1 r8 r10 c2 c8">-0.7360</td>
|
|
<td headers="r1 r8 r10 c2 c9">0.1646</td>
|
|
<td headers="r1 r8 r10 c3 c10">-1.4215</td>
|
|
<td headers="r1 r8 r10 c3 c11">0.3468</td>
|
|
<td headers="r1 r8 r10 c4 c12">-1.0979</td>
|
|
<td headers="r1 r8 r10 c4 c13">0.3727</td>
|
|
<td headers="r1 r8 r10 c5 c14">-0.9010</td>
|
|
<td headers="r1 r8 r10 c5 c15">0.5480</td>
|
|
<td headers="r1 r8 r10 c6 c16">2.9942</td>
|
|
<td headers="r1 r8 r10 c6 c17">1.5117</td>
|
|
<td headers="r1 r8 r10 c7 c18">-0.0031</td>
|
|
<td headers="r1 r8 r10 c7 c19">0.4606</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r11" headers="r1 c1">Beta (β)</th>
|
|
<td headers="r1 r11 c2 c8">0.1715</td>
|
|
<td headers="r1 r11 c2 c9">0.3845</td>
|
|
<td headers="r1 r11 c3 c10">0.4772</td>
|
|
<td headers="r1 r11 c3 c11">0.6194</td>
|
|
<td headers="r1 r11 c4 c12">1.4433</td>
|
|
<td headers="r1 r11 c4 c13">0.7481</td>
|
|
<td headers="r1 r11 c5 c14">2.2565</td>
|
|
<td headers="r1 r11 c5 c15">0.9483</td>
|
|
<td headers="r1 r11 c6 c16">3.4724</td>
|
|
<td headers="r1 r11 c6 c17">1.7498</td>
|
|
<td headers="r1 r11 c7 c18">0.7967</td>
|
|
<td headers="r1 r11 c7 c19">0.8136</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="12" class="panel" id="r12">Estimates including additional covariates (N = 5,273)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r13" headers="r12 c1">Constant</th>
|
|
<td headers="r12 r13 c2 c8">2.8342</td>
|
|
<td headers="r12 r13 c2 c9">0.2458</td>
|
|
<td headers="r12 r13 c3 c10">7.4846</td>
|
|
<td headers="r12 r13 c3 c11">0.6504</td>
|
|
<td headers="r12 r13 c4 c12">10.6660</td>
|
|
<td headers="r12 r13 c4 c13">0.5094</td>
|
|
<td headers="r12 r13 c5 c14">13.5403</td>
|
|
<td headers="r12 r13 c5 c15">0.7126</td>
|
|
<td headers="r12 r13 c6 c16">16.8483</td>
|
|
<td headers="r12 r13 c6 c17">1.0483</td>
|
|
<td headers="r12 r13 c7 c18">9.8793</td>
|
|
<td headers="r12 r13 c7 c19">0.8068</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r14" headers="r12 r13 c1">Male</th>
|
|
<td headers="r12 r13 r14 c2 c8">-0.1803</td>
|
|
<td headers="r12 r13 r14 c2 c9">0.1424</td>
|
|
<td headers="r12 r13 r14 c3 c10">0.4153</td>
|
|
<td headers="r12 r13 r14 c3 c11">0.2912</td>
|
|
<td headers="r12 r13 r14 c4 c12">0.3503</td>
|
|
<td headers="r12 r13 r14 c4 c13">0.3160</td>
|
|
<td headers="r12 r13 r14 c5 c14">0.6048</td>
|
|
<td headers="r12 r13 r14 c5 c15">0.3231</td>
|
|
<td headers="r12 r13 r14 c6 c16">1.9082</td>
|
|
<td headers="r12 r13 r14 c6 c17">0.6439</td>
|
|
<td headers="r12 r13 r14 c7 c18">1.8802</td>
|
|
<td headers="r12 r13 r14 c7 c19">0.3883</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r15" headers="r12 r13 c1">Self-employed</th>
|
|
<td headers="r12 r13 r15 c2 c8">0.5181</td>
|
|
<td headers="r12 r13 r15 c2 c9">0.1460</td>
|
|
<td headers="r12 r13 r15 c3 c10">-0.0383</td>
|
|
<td headers="r12 r13 r15 c3 c11">0.2446</td>
|
|
<td headers="r12 r13 r15 c4 c12">-0.0297</td>
|
|
<td headers="r12 r13 r15 c4 c13">0.3007</td>
|
|
<td headers="r12 r13 r15 c5 c14">-0.0430</td>
|
|
<td headers="r12 r13 r15 c5 c15">0.2990</td>
|
|
<td headers="r12 r13 r15 c6 c16">-0.5222</td>
|
|
<td headers="r12 r13 r15 c6 c17">0.5409</td>
|
|
<td headers="r12 r13 r15 c7 c18">0.2583</td>
|
|
<td headers="r12 r13 r15 c7 c19">0.3852</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r16" headers="r12 r13 c1">Education (16 years or more)</th>
|
|
<td headers="r12 r13 r16 c2 c8">0.4395</td>
|
|
<td headers="r12 r13 r16 c2 c9">0.2022</td>
|
|
<td headers="r12 r13 r16 c3 c10">1.5789</td>
|
|
<td headers="r12 r13 r16 c3 c11">0.5480</td>
|
|
<td headers="r12 r13 r16 c4 c12">3.2208</td>
|
|
<td headers="r12 r13 r16 c4 c13">0.8251</td>
|
|
<td headers="r12 r13 r16 c5 c14">7.9646</td>
|
|
<td headers="r12 r13 r16 c5 c15">1.8029</td>
|
|
<td headers="r12 r13 r16 c6 c16">23.0807</td>
|
|
<td headers="r12 r13 r16 c6 c17">2.7320</td>
|
|
<td headers="r12 r13 r16 c7 c18">6.7148</td>
|
|
<td headers="r12 r13 r16 c7 c19">0.4962</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r17" headers="r12 r13 c1">Health problem</th>
|
|
<td headers="r12 r13 r17 c2 c8">-0.7961</td>
|
|
<td headers="r12 r13 r17 c2 c9">0.1489</td>
|
|
<td headers="r12 r13 r17 c3 c10">-1.7903</td>
|
|
<td headers="r12 r13 r17 c3 c11">0.3224</td>
|
|
<td headers="r12 r13 r17 c4 c12">-2.5046</td>
|
|
<td headers="r12 r13 r17 c4 c13">0.3587</td>
|
|
<td headers="r12 r13 r17 c5 c14">-2.6701</td>
|
|
<td headers="r12 r13 r17 c5 c15">0.4777</td>
|
|
<td headers="r12 r13 r17 c6 c16">-4.0770</td>
|
|
<td headers="r12 r13 r17 c6 c17">0.6523</td>
|
|
<td headers="r12 r13 r17 c7 c18">-3.3150</td>
|
|
<td headers="r12 r13 r17 c7 c19">0.4900</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r18" headers="r12 r13 c1">Per capita family income<sup>a</sup></th>
|
|
<td headers="r12 r13 r18 c2 c8">-0.0315</td>
|
|
<td headers="r12 r13 r18 c2 c9">0.0067</td>
|
|
<td headers="r12 r13 r18 c3 c10">-0.0320</td>
|
|
<td headers="r12 r13 r18 c3 c11">0.0139</td>
|
|
<td headers="r12 r13 r18 c4 c12">-0.0417</td>
|
|
<td headers="r12 r13 r18 c4 c13">0.0188</td>
|
|
<td headers="r12 r13 r18 c5 c14">-0.0438</td>
|
|
<td headers="r12 r13 r18 c5 c15">0.0262</td>
|
|
<td headers="r12 r13 r18 c6 c16">0.0002</td>
|
|
<td headers="r12 r13 r18 c6 c17">0.0449</td>
|
|
<td headers="r12 r13 r18 c7 c18">0.0190</td>
|
|
<td headers="r12 r13 r18 c7 c19">0.0149</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r19" headers="r12 c1">Time dummy </th>
|
|
<td colspan="12"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r20" headers="r12 r19 c1">1996</th>
|
|
<td headers="r12 r19 r20 c2 c8">-0.1327</td>
|
|
<td headers="r12 r19 r20 c2 c9">0.2655</td>
|
|
<td headers="r12 r19 r20 c3 c10">-0.8386</td>
|
|
<td headers="r12 r19 r20 c3 c11">0.6311</td>
|
|
<td headers="r12 r19 r20 c4 c12">-0.8872</td>
|
|
<td headers="r12 r19 r20 c4 c13">0.4349</td>
|
|
<td headers="r12 r19 r20 c5 c14">-1.3314</td>
|
|
<td headers="r12 r19 r20 c5 c15">0.6142</td>
|
|
<td headers="r12 r19 r20 c6 c16">-1.6256</td>
|
|
<td headers="r12 r19 r20 c6 c17">1.0207</td>
|
|
<td headers="r12 r19 r20 c7 c18">-1.3010</td>
|
|
<td headers="r12 r19 r20 c7 c19">0.7651</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r21" headers="r12 r19 c1">1997</th>
|
|
<td headers="r12 r19 r21 c2 c8">-0.1609</td>
|
|
<td headers="r12 r19 r21 c2 c9">0.2517</td>
|
|
<td headers="r12 r19 r21 c3 c10">-0.9054</td>
|
|
<td headers="r12 r19 r21 c3 c11">0.5534</td>
|
|
<td headers="r12 r19 r21 c4 c12">-0.8870</td>
|
|
<td headers="r12 r19 r21 c4 c13">0.4379</td>
|
|
<td headers="r12 r19 r21 c5 c14">-1.1145</td>
|
|
<td headers="r12 r19 r21 c5 c15">0.5975</td>
|
|
<td headers="r12 r19 r21 c6 c16">-1.0945</td>
|
|
<td headers="r12 r19 r21 c6 c17">0.9798</td>
|
|
<td headers="r12 r19 r21 c7 c18">-1.0915</td>
|
|
<td headers="r12 r19 r21 c7 c19">0.7555</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r22" headers="r12 r19 c1">1998</th>
|
|
<td headers="r12 r19 r22 c2 c8">-0.3147</td>
|
|
<td headers="r12 r19 r22 c2 c9">0.2500</td>
|
|
<td headers="r12 r19 r22 c3 c10">-0.5087</td>
|
|
<td headers="r12 r19 r22 c3 c11">0.5623</td>
|
|
<td headers="r12 r19 r22 c4 c12">-0.4496</td>
|
|
<td headers="r12 r19 r22 c4 c13">0.4435</td>
|
|
<td headers="r12 r19 r22 c5 c14">-0.7323</td>
|
|
<td headers="r12 r19 r22 c5 c15">0.5747</td>
|
|
<td headers="r12 r19 r22 c6 c16">-1.2175</td>
|
|
<td headers="r12 r19 r22 c6 c17">0.9790</td>
|
|
<td headers="r12 r19 r22 c7 c18">-0.6702</td>
|
|
<td headers="r12 r19 r22 c7 c19">0.7659</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r23" headers="r12 r19 c1">1999</th>
|
|
<td headers="r12 r19 r23 c2 c8">-0.2058</td>
|
|
<td headers="r12 r19 r23 c2 c9">0.2966</td>
|
|
<td headers="r12 r19 r23 c3 c10">-0.0559</td>
|
|
<td headers="r12 r19 r23 c3 c11">0.5747</td>
|
|
<td headers="r12 r19 r23 c4 c12">0.1825</td>
|
|
<td headers="r12 r19 r23 c4 c13">0.4192</td>
|
|
<td headers="r12 r19 r23 c5 c14">-0.1535</td>
|
|
<td headers="r12 r19 r23 c5 c15">0.6965</td>
|
|
<td headers="r12 r19 r23 c6 c16">-0.2450</td>
|
|
<td headers="r12 r19 r23 c6 c17">1.1366</td>
|
|
<td headers="r12 r19 r23 c7 c18">-0.4380</td>
|
|
<td headers="r12 r19 r23 c7 c19">0.7715</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r24" headers="r12 c1">Group dummy</th>
|
|
<td colspan="12"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r25" headers="r12 r24 c1">Ages <span class="nobr">62–64</span></th>
|
|
<td headers="r12 r24 r25 c2 c8">-0.6107</td>
|
|
<td headers="r12 r24 r25 c2 c9">0.2039</td>
|
|
<td headers="r12 r24 r25 c3 c10">-1.2691</td>
|
|
<td headers="r12 r24 r25 c3 c11">0.3149</td>
|
|
<td headers="r12 r24 r25 c4 c12">-1.9061</td>
|
|
<td headers="r12 r24 r25 c4 c13">0.4030</td>
|
|
<td headers="r12 r24 r25 c5 c14">-3.3553</td>
|
|
<td headers="r12 r24 r25 c5 c15">0.3556</td>
|
|
<td headers="r12 r24 r25 c6 c16">-4.9072</td>
|
|
<td headers="r12 r24 r25 c6 c17">0.6676</td>
|
|
<td headers="r12 r24 r25 c7 c18">-3.7791</td>
|
|
<td headers="r12 r24 r25 c7 c19">0.4862</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r26" headers="r12 r24 c1">Ages <span class="nobr">70–72</span></th>
|
|
<td headers="r12 r24 r26 c2 c8">-0.8882</td>
|
|
<td headers="r12 r24 r26 c2 c9">0.1843</td>
|
|
<td headers="r12 r24 r26 c3 c10">-1.9166</td>
|
|
<td headers="r12 r24 r26 c3 c11">0.3952</td>
|
|
<td headers="r12 r24 r26 c4 c12">-1.5537</td>
|
|
<td headers="r12 r24 r26 c4 c13">0.4871</td>
|
|
<td headers="r12 r24 r26 c5 c14">-2.1284</td>
|
|
<td headers="r12 r24 r26 c5 c15">0.5133</td>
|
|
<td headers="r12 r24 r26 c6 c16">-2.5880</td>
|
|
<td headers="r12 r24 r26 c6 c17">1.0722</td>
|
|
<td headers="r12 r24 r26 c7 c18">-1.5431</td>
|
|
<td headers="r12 r24 r26 c7 c19">0.5082</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r27" headers="r12 c1">Beta (β)</th>
|
|
<td headers="r12 r27 c2 c8">-0.1247</td>
|
|
<td headers="r12 r27 c2 c9">0.4195</td>
|
|
<td headers="r12 r27 c3 c10">0.2294</td>
|
|
<td headers="r12 r27 c3 c11">0.7357</td>
|
|
<td headers="r12 r27 c4 c12">1.1532</td>
|
|
<td headers="r12 r27 c4 c13">0.8175</td>
|
|
<td headers="r12 r27 c5 c14">2.3658</td>
|
|
<td headers="r12 r27 c5 c15">1.1255</td>
|
|
<td headers="r12 r27 c6 c16">2.8517</td>
|
|
<td headers="r12 r27 c6 c17">1.4311</td>
|
|
<td headers="r12 r27 c7 c18">0.0256</td>
|
|
<td headers="r12 r27 c7 c19">0.9275</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="13">SOURCE: Author's estimates.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="13">NOTES: The sample size of the bottom panel is smaller because individuals' characteristics (variables from the Survey of Income and Program Participation) are missing for some individuals. This study uses Stata to obtain these regression estimates. The dependent variable is annual Social Security taxable earnings (in thousands of dollars). Standard errors are obtained by bootstrap resampling (100 replications).
|
|
<div class="newNote"><abbr class="spell">OLS</abbr> = ordinary least squares.</div>
|
|
</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="13">a. Net of personal earnings (in thousands of dollars).</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p>Whether these estimates can be interpreted as a causal effect of the RET removal on earnings relies on the assumption that the estimate of <i>β</i> is zero in the absence of the removal. There are two simple ways to test this assumption. One is to test whether the estimate of <i>β</i> is equal to zero, using samples of nonbeneficiaries who were working in 1996, 1997, 1998, 1999, and 2000. Since working nonbeneficiaries did not react to the removal of the RET, the estimate would be zero if <i>β</i> does identify the causal effect. The other way is to test whether the estimate of <i>β</i> is equal to zero, using only data from the 1996–1999 period (Angrist and Krueger 1999). Since earnings test rules did not change for individuals aged <span class="nobr">65–69</span> during that period, the estimate of <i>β</i> would be zero here as well. The former approach is less attractive in this study because the sample includes only a small number of working nonbeneficiaries.<sup><a href="#mn23" id="mt23">23</a></sup></p>
|
|
<p>Hence this study uses the latter test. Table 6 presents the results of estimates where the estimates for the beta (<i>β</i>) term are small and statistically insignificant in all percentiles. The results thus support the validity of the causal interpretation <i>β</i> of these estimates.<sup><a href="#mn24" id="mt24">24</a></sup></p>
|
|
<div class="table" id="table6">
|
|
<table>
|
|
<caption><span class="tableNumber">Table 6. </span>Difference-in-differences estimates for individuals aged <span class="nobr">65–69</span> for the preremoval period, <span class="nobr">1996–1999,</span> by percentiles of annual Social Security taxable earnings </caption>
|
|
<colgroup span="1" style="width:16em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<colgroup span="2" style="width:5em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th rowspan="2" class="stubHeading" scope="colgroup">Variable</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">25th percentile</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">50th percentile</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">65th percentile</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">75th percentile</th>
|
|
<th colspan="2" class="spanner" scope="colgroup">85th percentile</th>
|
|
</tr>
|
|
<tr>
|
|
<th scope="col">Estimate</th>
|
|
<th scope="col">Standard error</th>
|
|
<th scope="col">Estimate</th>
|
|
<th scope="col">Standard error</th>
|
|
<th scope="col">Estimate</th>
|
|
<th scope="col">Standard error</th>
|
|
<th scope="col">Estimate</th>
|
|
<th scope="col">Standard error</th>
|
|
<th scope="col">Estimate</th>
|
|
<th scope="col">Standard error</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Constant</th>
|
|
<td>2.5487</td>
|
|
<td>0.2831</td>
|
|
<td>7.4453</td>
|
|
<td>0.5963</td>
|
|
<td>10.7819</td>
|
|
<td>0.8609</td>
|
|
<td>13.3443</td>
|
|
<td>0.6891</td>
|
|
<td>16.5542</td>
|
|
<td>1.3547</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Male</th>
|
|
<td>-0.0744</td>
|
|
<td>0.1753</td>
|
|
<td>0.5038</td>
|
|
<td>0.2966</td>
|
|
<td>0.2663</td>
|
|
<td>0.3151</td>
|
|
<td>0.5809</td>
|
|
<td>0.3516</td>
|
|
<td>1.2908</td>
|
|
<td>0.7020</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Self-employed</th>
|
|
<td>0.5238</td>
|
|
<td>0.1422</td>
|
|
<td>-0.0901</td>
|
|
<td>0.3031</td>
|
|
<td>-0.1527</td>
|
|
<td>0.3239</td>
|
|
<td>-0.1809</td>
|
|
<td>0.3575</td>
|
|
<td>-0.5225</td>
|
|
<td>0.7704</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Education (16 years or more)</th>
|
|
<td>0.4721</td>
|
|
<td>0.2407</td>
|
|
<td>1.5278</td>
|
|
<td>0.5206</td>
|
|
<td>3.2682</td>
|
|
<td>0.8986</td>
|
|
<td>8.3038</td>
|
|
<td>2.5879</td>
|
|
<td>26.0808</td>
|
|
<td>3.7117</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Health problem</th>
|
|
<td>-0.7629</td>
|
|
<td>0.1534</td>
|
|
<td>-1.5905</td>
|
|
<td>0.2939</td>
|
|
<td>-2.3230</td>
|
|
<td>0.4413</td>
|
|
<td>-2.3941</td>
|
|
<td>0.4481</td>
|
|
<td>-3.4588</td>
|
|
<td>0.6852</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Per capita family income<sup>a</sup></th>
|
|
<td>-0.0325</td>
|
|
<td>0.0096</td>
|
|
<td>-0.0293</td>
|
|
<td>0.0150</td>
|
|
<td>-0.0360</td>
|
|
<td>0.0207</td>
|
|
<td>-0.0433</td>
|
|
<td>0.0264</td>
|
|
<td>0.0002</td>
|
|
<td>0.0551</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Time dummy </th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">1997</th>
|
|
<td>0.0600</td>
|
|
<td>0.2354</td>
|
|
<td>-0.9024</td>
|
|
<td>0.5630</td>
|
|
<td>-1.0714</td>
|
|
<td>0.6140</td>
|
|
<td>-1.1163</td>
|
|
<td>0.5231</td>
|
|
<td>-1.2768</td>
|
|
<td>1.0147</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">1998</th>
|
|
<td>0.0364</td>
|
|
<td>0.2338</td>
|
|
<td>-0.9534</td>
|
|
<td>0.5240</td>
|
|
<td>-1.0714</td>
|
|
<td>0.6142</td>
|
|
<td>-0.9638</td>
|
|
<td>0.5454</td>
|
|
<td>-1.0728</td>
|
|
<td>0.9877</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">1999</th>
|
|
<td>-0.0893</td>
|
|
<td>0.2694</td>
|
|
<td>-0.4970</td>
|
|
<td>0.5118</td>
|
|
<td>-0.6491</td>
|
|
<td>0.6492</td>
|
|
<td>-0.5332</td>
|
|
<td>0.5086</td>
|
|
<td>-1.1941</td>
|
|
<td>0.9851</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Group dummy</th>
|
|
<td colspan="10"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Ages <span class="nobr">62–64</span></th>
|
|
<td>-0.5117</td>
|
|
<td>0.2148</td>
|
|
<td>-1.2817</td>
|
|
<td>0.3130</td>
|
|
<td>-1.9003</td>
|
|
<td>0.4749</td>
|
|
<td>-3.3711</td>
|
|
<td>0.4172</td>
|
|
<td>-4.6347</td>
|
|
<td>0.8247</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" scope="row">Ages <span class="nobr">70–72</span></th>
|
|
<td>-0.8744</td>
|
|
<td>0.1966</td>
|
|
<td>-1.9959</td>
|
|
<td>0.4058</td>
|
|
<td>-1.4375</td>
|
|
<td>0.6443</td>
|
|
<td>-2.0922</td>
|
|
<td>0.4917</td>
|
|
<td>-2.5570</td>
|
|
<td>1.2394</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="rowgroup">Beta (β)</th>
|
|
<td>-0.0218</td>
|
|
<td>0.4371</td>
|
|
<td>-0.3702</td>
|
|
<td>0.6680</td>
|
|
<td>0.1308</td>
|
|
<td>0.9360</td>
|
|
<td>0.1479</td>
|
|
<td>0.8815</td>
|
|
<td>0.2541</td>
|
|
<td>1.4635</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="firstNote" colspan="11">SOURCE: Author's estimates using Stata.</td>
|
|
</tr>
|
|
<tr>
|
|
<td class="note" colspan="11">NOTE: Sample size is 4,237. The dependent variable is annual Social Security taxable earnings (in thousands of dollars). Standard errors are obtained by bootstrap resampling (100 replications). </td>
|
|
</tr>
|
|
<tr>
|
|
<td class="lastNote" colspan="11">a. Net of personal earnings (in thousands of dollars).</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<h2>Effects on Retirement Benefit Applications</h2>
|
|
<p>In addition to effects on earnings and employment rates, the removal of the RET has been expected to accelerate applications for old-age benefits among individuals who have reached the full retirement age. The magnitude of the effects on that acceleration is bounded by the number of individuals who have not already applied for benefits. As in Table 1, almost 90 percent of those aged <span class="nobr">65–69</span> before 2000 were OASDI beneficiaries, and the percentage in 2000 did not increase noticeably. Given the small sample size of that age group, this tabulation may have limited value because annual variations of percentage values depend partly on the differences in benefit receipts between the newly entering cohort (aged 65 in those years) and the exiting cohort (aged 70 in those years).</p>
|
|
<p>To reflect the change in the old-age benefit application rate between the preremoval period and 2000, the analysis included an alternative tabulation. Table 7 shows counts of OASDI beneficiaries by their first entitlement age among the yearly applicant pool. This count indicates that the removal of the earnings test accelerated applications for old-age benefits. In each year from 1996 to 2000, between 397 and 482 OASDI applicants of all ages were in the study's sample. Until 1999, between 16 percent and 21 percent of the applicants were eligible at ages <span class="nobr">65–69</span>. The percentage of eligibles rises to 25.3 percent in 2000. The sharp increase in new awards appears to be consistent with tabulations using comparable data from the <i>Annual Statistical Supplement</i> to the <i>Social Security Bulletin</i> for 1997–2001. The tabulations of beneficiaries aged <span class="nobr">65–69</span>, shown in the bottom panel of Table 7, indicate that more than 220,000 new awards (about 2 percent of all individuals aged <span class="nobr">65–69</span> in 2000) may be attributable to the RET removal in 2000.</p>
|
|
<div class="table" id="table7">
|
|
<table>
|
|
<caption><span class="tableNumber">Table 7. </span>Applications for <abbr class="spell">OASDI</abbr> benefits by individuals aged <span class="nobr">65–69</span> in <span class="nobr">1996–2000</span></caption>
|
|
<colgroup span="1" style="width:18em"></colgroup>
|
|
<colgroup span="5" style="width:5em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th class="stubHeading" id="c1"> </th>
|
|
<th id="c2">1996</th>
|
|
<th id="c3">1997</th>
|
|
<th id="c4">1998</th>
|
|
<th id="c5">1999</th>
|
|
<th id="c6">2000</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" id="r1" headers="c1">All eligible applicants </th>
|
|
<td headers="r1 c2">415</td>
|
|
<td headers="r1 c3">482</td>
|
|
<td headers="r1 c4">397</td>
|
|
<td headers="r1 c5">441</td>
|
|
<td headers="r1 c6">478</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="5" class="panel" id="r2"><abbr class="spell">OASDI</abbr> applicants</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r3" headers="r2 c1">Applicants eligible at ages <span class="nobr">65–69</span></th>
|
|
<td colspan="5"></td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r4" headers="r2 r3 c1">Number</th>
|
|
<td headers="r2 r3 r4 c2">66</td>
|
|
<td headers="r2 r3 r4 c3">94</td>
|
|
<td headers="r2 r3 r4 c4">61</td>
|
|
<td headers="r2 r3 r4 c5">93</td>
|
|
<td headers="r2 r3 r4 c6">121</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r5" headers="r2 r3 c1">Percentage of all eligible applicants</th>
|
|
<td headers="r2 r3 r5 c2">15.9</td>
|
|
<td headers="r2 r3 r5 c3">19.5</td>
|
|
<td headers="r2 r3 r5 c4">15.4</td>
|
|
<td headers="r2 r3 r5 c5">21.1</td>
|
|
<td headers="r2 r3 r5 c6">25.3</td>
|
|
</tr>
|
|
<tr>
|
|
<td> </td>
|
|
<th colspan="5" class="panel" id="r6"><abbr class="spell">OASDI</abbr> beneficiaries aged <span class="nobr">65–69</span> (in thousands)</th>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r7" headers="r6 c1">Population aged <span class="nobr">65–69</span></th>
|
|
<td headers="r6 r7 c2">9,994</td>
|
|
<td headers="r6 r7 c3">9,846</td>
|
|
<td headers="r6 r7 c4">9,688</td>
|
|
<td headers="r6 r7 c5">9,602</td>
|
|
<td headers="r6 r7 c6">9,575</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r8" headers="r6 c1">Beneficiaries at the end of each year</th>
|
|
<td headers="r6 r8 c2">8,594</td>
|
|
<td headers="r6 r8 c3">8,489</td>
|
|
<td headers="r6 r8 c4">8,350</td>
|
|
<td headers="r6 r8 c5">8,343</td>
|
|
<td headers="r6 r8 c6">8,746</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r9" headers="r6 r8 c1">Worker</th>
|
|
<td headers="r6 r8 r9 c2">6,917</td>
|
|
<td headers="r6 r8 r9 c3">6,889</td>
|
|
<td headers="r6 r8 r9 c4">6,819</td>
|
|
<td headers="r6 r8 r9 c5">6,860</td>
|
|
<td headers="r6 r8 r9 c6">7,285</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r10" headers="r6 r8 c1">Spouse</th>
|
|
<td headers="r6 r8 r10 c2">878</td>
|
|
<td headers="r6 r8 r10 c3">846</td>
|
|
<td headers="r6 r8 r10 c4">806</td>
|
|
<td headers="r6 r8 r10 c5">778</td>
|
|
<td headers="r6 r8 r10 c6">768</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r11" headers="r6 r8 c1"><span class="nobr">Widow(er)</span></th>
|
|
<td headers="r6 r8 r11 c2">799</td>
|
|
<td headers="r6 r8 r11 c3">754</td>
|
|
<td headers="r6 r8 r11 c4">725</td>
|
|
<td headers="r6 r8 r11 c5">705</td>
|
|
<td headers="r6 r8 r11 c6">693</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" id="r12" headers="r6 c1">New awards in each year</th>
|
|
<td headers="r6 r12 c2">465</td>
|
|
<td headers="r6 r12 c3">479</td>
|
|
<td headers="r6 r12 c4">481</td>
|
|
<td headers="r6 r12 c5">496</td>
|
|
<td headers="r6 r12 c6">720</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r13" headers="r6 r12 c1">Men</th>
|
|
<td headers="r6 r12 r13 c2">287</td>
|
|
<td headers="r6 r12 r13 c3">286</td>
|
|
<td headers="r6 r12 r13 c4">290</td>
|
|
<td headers="r6 r12 r13 c5">302</td>
|
|
<td headers="r6 r12 r13 c6">463</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub1" id="r14" headers="r6 r12 c1">Women</th>
|
|
<td headers="r6 r12 r14 c2">178</td>
|
|
<td headers="r6 r12 r14 c3">193</td>
|
|
<td headers="r6 r12 r14 c4">191</td>
|
|
<td headers="r6 r12 r14 c5">195</td>
|
|
<td headers="r6 r12 r14 c6">257</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="onlyNote" colspan="6">SOURCE: Author's tabulations using the 1996 Survey of Income and Program Participation matched with the Social Security Administration's Master Beneficiary Record files (for <abbr class="spell">OASDI</abbr> applicants); Annual Statistical Supplement to the Social Security Bulletin, <span class="nobr">1997–2000</span> (for <abbr class="spell">OASDI</abbr> beneficiaries aged <span class="nobr">65–69</span>).</td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<div id="notes">
|
|
<h2>Notes</h2>
|
|
<p> <a href="#mt1" id="mn1">1</a>. The FRA, which was age 65 before 2000, gradually increases to 67 for beneficiaries reaching age 62 in 2022 or later. The law was enacted April 7, 2000, but the earnings test for beneficiaries was eliminated for taxable years ending after December 31, 1999. The earnings test for individuals aged <span class="nobr">70–71</span> had been eliminated in 1983.</p>
|
|
<p> <a href="#mt2" id="mn2">2</a>. Before this change, $1 of retirement benefits was withheld for every $3 of earnings above the exemption amount ($15,500 in 1999). See Social Security Administration (2001a, 123) for annual maximum exemption amounts and the history of the earnings test.</p>
|
|
<p> <a href="#mt3" id="mn3">3</a>. See Leonesio (1990) for reviews and references for early studies.</p>
|
|
<p> <a href="#mt4" id="mn4">4</a>. Friedberg (2000) investigated three changes in the RET—those made in 1978, 1983, and 1990. In their analysis, Gruber and Orszag (2000) included all changes in 1973–1998.</p>
|
|
<p> <a href="#mt5" id="mn5">5</a>. At the time of this study, data on earnings were available only through 2000. Hence the interest of this study is in short-run responses.</p>
|
|
<p> <a href="#mt6" id="mn6">6</a>. These administrative records provide exact dates of birth and benefit entitlement, which are crucial in investigating reactions to RET changes. For example, earnings test rules are different for beneficiaries reaching the FRA by December 31, 1999, during 2000, or after 2000. The exact dates of birth and benefit entitlement are not available in the Current Population Survey (CPS) data used in Friedberg (2000) and Gruber and Orszag (2000).</p>
|
|
<p> <a href="#mt7" id="mn7">7</a>. See Buchinsky (1994) and Heckman, Smith, and Clements (1997) for examples of a quantile (quartile, percentile) regression approach.</p>
|
|
<p> <a href="#mt8" id="mn8">8</a>. The SSA Numident file is a master file of all assigned Social Security numbers; it contains both birth and death dates. The SSR file contains information on every individual who ever applied for SSI benefits and every individual who received state benefits before 1974.</p>
|
|
<p> <a href="#mt9" id="mn9">9</a>. Although the SER reports annual summary earnings only for employment covered by Social Security, all wages (including those not covered by Social Security) are counted under the RET (Social Security Administration 2001b, 417–418).</p>
|
|
<p><a href="#mt10" id="mn10">10</a>. That is, the worker must have been in covered employment for at least as many quarters as the number of full calendar years elapsing after age 21 and before age 62, disability, or death, whichever comes first. Dependents and <span class="nobr">widow(er)s</span> of covered workers can be eligible for benefits.</p>
|
|
<p><a href="#mt11" id="mn11">11</a>. For further discussions about the SER and MBR files, see Panis and others (2000).</p>
|
|
<p><a href="#mt12" id="mn12">12</a>. The annual Social Security taxable earnings level may lead to underestimates of the labor supply because of the exclusion of earnings not covered by Social Security. All pay for work either covered or not covered by Social Security counts under the earnings test.</p>
|
|
<p><a href="#mt13" id="mn13">13</a>. The SER reports earnings from Social Security-covered employment only. Thus, workers who are not covered can be considered here as "not employed."</p>
|
|
<p><a href="#mt14" id="mn14">14</a>. There were 6.86 million retired-worker beneficiaries, 0.78 million spouse beneficiaries, and 0.71 million <span class="nobr">widow(er)</span> beneficiaries in this age group (Social Security Administration 2000, 157, 159, 163, and 168).</p>
|
|
<p><a href="#mt15" id="mn15">15</a>. The number of OASDI beneficiaries includes both primary and auxiliary beneficiaries. Their benefit status is determined by the date of initial entitlement (DOEI)—the point at which all requirements for eligibility have been met and a claim has been filed. Although 6 months of retroactive entitlement is possible, this study uses the DOEI definition, instead of a definition based on application filing date, because most beneficiaries file their applications before their retirement date.</p>
|
|
<p><a href="#mt16" id="mn16">16</a>. Although workers must be fully insured to enroll in OASDI programs, OASDI beneficiaries outnumber fully insured beneficiaries. The reason is that the OASDI beneficiary group also includes auxiliary beneficiaries and Disability Insurance (DI) beneficiaries who have been enrolled in the program since their youth (and who do not have 40 quarters of coverage).</p>
|
|
<p><a href="#mt17" id="mn17">17</a>. Throughout this discussion, individuals who have nonzero Social Security taxable earnings are considered employed.</p>
|
|
<p><a href="#mt18" id="mn18">18</a>. These individuals include both primary and auxiliary beneficiaries whose benefit entitlements (requirements for eligibility) were met by December 31 of the preceding year.</p>
|
|
<p><a href="#mt19" id="mn19">19</a>. The RET removal can modify beneficiaries' work effort through two different effects: substitution and income. The removal causes an increase in a beneficiary's current disposable income and a subsequent decrease in work effort, or it may cause the price of working to rise and a subsequent increase in work effort.</p>
|
|
<p><a href="#mt20" id="mn20">20</a>. The number of new applicants in 2000 was 121 (23, 52, 18, and 28 applicants in each quarter).</p>
|
|
<p><a href="#mt21" id="mn21">21</a>. The illustrative threshold ($16,500) may seem arbitrary, but adjusting the 1999 threshold by the national average wage level yields even less than $16,500. Since the RET removal, the RET threshold for beneficiaries who reached the FRA during 2000 has been $17,000.</p>
|
|
<p><a href="#mt22" id="mn22">22</a>. In addition to time and group dummies, these regressions include additional covariates—age, sex, race and ethnicity (white, black, and Hispanic), alternative income amounts, a set of dummies for number of school years, a dummy indicating work-limiting health problems, and a dummy indicating a resident of a major metropolitan area. Detailed results are available from the author (<a href="mailto:jae.song@ssa.gov">jae.song@ssa.gov</a>).</p>
|
|
<p><a href="#mt23" id="mn23">23</a>. The numbers of working nonbeneficiaries at the end of each year are shown in the following table, by age:</p>
|
|
<div class="table">
|
|
<table>
|
|
<colgroup span="1" style="width:4em"></colgroup>
|
|
<colgroup span="5" style="width:4em"></colgroup>
|
|
<thead>
|
|
<tr>
|
|
<th class="stubHeading" scope="col">Age</th>
|
|
<th scope="col">1996</th>
|
|
<th scope="col">1997</th>
|
|
<th scope="col">1998</th>
|
|
<th scope="col">1999</th>
|
|
<th scope="col">2000</th>
|
|
</tr>
|
|
</thead>
|
|
<tbody>
|
|
<tr>
|
|
<th class="stub0" scope="row"><span class="nobr">62–64</span></th>
|
|
<td>268</td>
|
|
<td>268</td>
|
|
<td>305</td>
|
|
<td>296</td>
|
|
<td>276</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row"><span class="nobr">65–69</span></th>
|
|
<td>74</td>
|
|
<td>76</td>
|
|
<td>65</td>
|
|
<td>52</td>
|
|
<td>48</td>
|
|
</tr>
|
|
<tr>
|
|
<th class="stub0" scope="row"><span class="nobr">70–72</span></th>
|
|
<td>14</td>
|
|
<td>13</td>
|
|
<td>14</td>
|
|
<td>15</td>
|
|
<td>12</td>
|
|
</tr>
|
|
</tbody>
|
|
<tfoot>
|
|
<tr>
|
|
<td class="noNotes" colspan="6"> </td>
|
|
</tr>
|
|
</tfoot>
|
|
</table>
|
|
</div>
|
|
<p><a href="#mt24" id="mn24">24</a>. Similarly, this study tested the validity of the causal assumption using data covering different pre-2000 periods. These results also indicate that the interaction terms are small and statistically insignificant. Space limitations preclude reporting those results here, but they are available from the author upon request (<a href="mailto:jae.song@ssa.gov">jae.song@ssa.gov</a>).</p>
|
|
</div>
|
|
<div id="references">
|
|
<h2>References</h2>
|
|
<p>Angrist, Joshua D., and Alan B. Krueger. 1999. "<i>Empirical Strategies in Labor Economics.</i>" In <i>Handbook of Labor Economics</i>, vol. 3A, edited by Orley C. Ashenfelter and David Card. Amsterdam: Elsevier Science Publishers B.V.</p>
|
|
<p>Buchinsky, Moshe. 1994. "Changes in the U.S. Wage Structure 1963–1987: Application of Quantile Regression." <i>Econometrica</i> 62(2): 405–458.</p>
|
|
<p>Card, David, and Alan B. Krueger. 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania." <i>American Economic Review</i> 84(4): 772–793.</p>
|
|
<p>Friedberg, Leora. 2000. "The Labor Supply Effects of the Social Security Earnings Test." <i>Review of Economics and Statistics</i> 82(1): 48–63.</p>
|
|
<p>Gruber, Jonathan, and Peter Orszag. 2000. <i>Does the Social Security Earnings Test Affect Labor Supply and Benefit Receipt?</i> NBER Working Paper No. 7923. Cambridge, Mass.: National Bureau of Economic Research.</p>
|
|
<p>Heckman, James J.; Jeffery Smith; and Nancy Clements. 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts." <i>Review of Economic Studies</i> 64(4): 487–535.</p>
|
|
<p>Krueger, Alan B., and Bruce D. Meyer. 2002. <i>Labor Supply Effects of Social Insurance</i>. NBER Working Paper No. 9014. Cambridge, Mass.: National Bureau of Economic Research.</p>
|
|
<p>LaLonde, Robert J. 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data." <i>American Economic Review</i> 76(4): 604–620.</p>
|
|
<p>Leonesio, Michael V. 1990. "Effects of the Social Security Earnings Test on the Labor Market Activity of Older Americans: A Review of the Evidence." <i>Social Security Bulletin</i> 53(May): 2–21.</p>
|
|
<p>Myers, Robert J. 1993. <i>Social Security</i>, 4<sup>th</sup> ed. Philadelphia: Pension Research Council, and University of Pennsylvania Press.</p>
|
|
<p>Packard, Michael D. 1990. "The Earnings Test and the Short-Run Work Response to Its Elimination." <i>Social Security Bulletin</i> 53(9): 2–16.</p>
|
|
<p>Panis, Constantijn; Roald Euller; Cynthia Grant; Melissa Bradly; Christine E. Peterson; Randall Hirscher; and Paul Stinberg. 2000. <i>SSA Program Data User's Manual</i>. Baltimore, Md.: Social Security Administration.</p>
|
|
<p>Social Security Administration. 1997–2001a. <i>Annual Statistical Supplement</i> to the <i>Social Security Bulletin</i>. Washington D.C.: U.S. Government Printing Office.</p>
|
|
<p>____________. 2001b. <i>Social Security Handbook</i>, 14<sup>th</sup> ed. Washington, D.C.: U.S. Government Printing Office.</p>
|
|
<p>Stata. 1999. <i>Stata Reference Guide</i>, Release 7. College Station, Texas: Stata Press.</p>
|
|
</div>
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</div>
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