The Effect of Old Age Assistance on Retirement / Leora Friedberg.

By:

Friedberg, Leora

Contributor(s):

National Bureau of Economic Research

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w6548.Publication details: Cambridge, Mass. National Bureau of Economic Research 1998.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Researchers have devoted considerable attention to analyzing the impact of Social Security on retirement, with mixed findings. However, Old Age Assistance (OAA), a means-tested program established at the same time, dwarfed Social Security until the 1950s and coincided with the early decline in elderly participation. In addition, OAA benefit levels were determined by the states - a key source of policy variation that is missing in the case of Social Security. I estimate the relationship between OAA benefit levels and elderly labor force participation using individual data from the 1940 and 1950 Censuses. The effect of OAA is found to be strong and implies that participation would have risen slightly instead of falling if benefits had not been raised during the 1940s. I also present evidence against the endogeneity of state benefit levels.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w6548 (Browse shelf(Opens below))	Not For Loan

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May 1998.

Researchers have devoted considerable attention to analyzing the impact of Social Security on retirement, with mixed findings. However, Old Age Assistance (OAA), a means-tested program established at the same time, dwarfed Social Security until the 1950s and coincided with the early decline in elderly participation. In addition, OAA benefit levels were determined by the states - a key source of policy variation that is missing in the case of Social Security. I estimate the relationship between OAA benefit levels and elderly labor force participation using individual data from the 1940 and 1950 Censuses. The effect of OAA is found to be strong and implies that participation would have risen slightly instead of falling if benefits had not been raised during the 1940s. I also present evidence against the endogeneity of state benefit levels.