The Effect of the Social Security Earnings Test on Male Labor Supply
New Evidence from Survey and Administrative Data
Published In: Journal of Human Resources, v 43, no. 1, Winter 2008, p. 57-87
Posted on RAND.org on December 31, 2007
Despite numerous empirical studies, there is surprisingly little agreement about whether the Social Security earnings test affects male labor supply. In this paper, the authors provide a comprehensive analysis of the labor supply effects of the earnings test using longitudinal administrative earnings data and more commonly used survey data. They find that the response to the earnings test in survey data is obfuscated by measurement error and labor market rigidities. Accounting for these factors, their results suggest a consistent and substantial response to the earnings test, especially for younger men.