The effective tax on earnings embodied in the Social Security retirement earnings test has been as high as 50 percent. Despite numerous empirical studies, there is surprisingly little agreement about whether the earnings test affects male labor supply. In this paper, the authors provide a comprehensive analysis of the earnings test for men using longitudinal administrative earnings data and more commonly used survey data. They find that much of the response in survey data is obfuscated by measurement error and labor market rigidities. Their results suggest a consistent and substantial response to the earnings test, especially for younger men.
Loughran, David S. and Steven Haider, Do Elderly Men Respond to Taxes on Earnings? Evidence from the Social Security Retirement Earnings Test. Santa Monica, CA: RAND Corporation, 2007. https://www.rand.org/pubs/working_papers/WR223-1.html.
Loughran, David S. and Steven Haider, Do Elderly Men Respond to Taxes on Earnings? Evidence from the Social Security Retirement Earnings Test, Santa Monica, Calif.: RAND Corporation, WR-223-1, 2007. As of June 22, 2022: https://www.rand.org/pubs/working_papers/WR223-1.html