Haider, Steven J., and David S. Loughran. 2008. “The Effect of the Social Security Earnings Test on Male Labor Supply: New Evidence from Survey and Administrative Data.” Journal of Human Resources 43(1): 57–87.
Despite numerous empirical studies, there is surprisingly little agreement about whether the Social Security earnings test affects male labor supply. In this paper, we provide a comprehensive analysis of the labor supply effects of the earnings test using longitudinal administrative earnings data and more commonly used survey data. We find that the response to the earnings test in survey data is obfuscated by measurement error and labor market rigidities. Accounting for these factors, our results suggest a consistent and substantial response to the earnings test, especially for younger men.
Steven J. Haider is a professor of economics at Michigan State University. David S. Loughran is a senior economist at the RAND Corporation. The authors gratefully acknowledge the financial support of the Social Security Administration through the Michigan Retirement Research Center and from the National Institute on Aging under grant 5 P01 AG022481-04 and the helpful comments of Jeff Biddle, Dan Black, John Bound, Tom DeLeire, Stacy Dickert-Conlin, Alan Gustman, Kathleen McGarry, Paul Menchik, Deborah Reed, Gary Solon, Mel Stephens, and Steve Woodbury. The findings and conclusions expressed herein are solely those of the authors and do not represent the views of the Michigan Retirement Research Center, the Social Security Administration, the National Institute on Aging, or any other agency of the Federal government. The data used in this article can be obtained beginning August 2008 through July 2011 from Steven Haider, 110 Marshall-Adams Hall; Department of Economics; Michigan State University; East Lansing, MI 48824; <haider@msu.edu>.