TY - JOUR
T1 - SOCIAL SECURITY, LABOR SUPPLY, AND HEALTH OF OLDER WORKERS
T2 - QUASI-EXPERIMENTAL EVIDENCE FROM A LARGE REFORM
AU - Saporta-Eksten, Itay
AU - Shurtz, Ity
AU - Weisburd, Sarit
N1 - Publisher Copyright:
© The Author(s) 2020. Published by Oxford University Press on behalf of European Economic Association. All rights reserved.
PY - 2021/8/1
Y1 - 2021/8/1
N2 - We study the effects of public pension systems on the retirement timing of older workers and, in turn, the health consequences of delaying retirement by those workers. Causal inference relies on a social security reform in Israel that shifted payments from husbands to their (nonworking) wives, thereby substantially reducing the implied tax on the husband’s employment while keeping overall household wealth constant. Using administrative social security data, we estimate extensive-margin labor supply elasticities with respect to the average net-of-tax rate of about 0.43 for men over 65. Using the reform to instrument for employment, we find that working an additional full year at old age decreases longevity. This mortality effect occurs after age 75 and is driven by workers holding blue-collar jobs. Finally, we evaluate the effect of the reform on earnings. The results imply a small value for an additional year of life, suggesting that workers underestimate the health cost of employment at older ages.
AB - We study the effects of public pension systems on the retirement timing of older workers and, in turn, the health consequences of delaying retirement by those workers. Causal inference relies on a social security reform in Israel that shifted payments from husbands to their (nonworking) wives, thereby substantially reducing the implied tax on the husband’s employment while keeping overall household wealth constant. Using administrative social security data, we estimate extensive-margin labor supply elasticities with respect to the average net-of-tax rate of about 0.43 for men over 65. Using the reform to instrument for employment, we find that working an additional full year at old age decreases longevity. This mortality effect occurs after age 75 and is driven by workers holding blue-collar jobs. Finally, we evaluate the effect of the reform on earnings. The results imply a small value for an additional year of life, suggesting that workers underestimate the health cost of employment at older ages.
UR - http://www.scopus.com/inward/record.url?scp=85131177273&partnerID=8YFLogxK
U2 - 10.1093/jeea/jvaa053
DO - 10.1093/jeea/jvaa053
M3 - Article
AN - SCOPUS:85131177273
SN - 1542-4766
VL - 19
SP - 2168
EP - 2208
JO - Journal of the European Economic Association
JF - Journal of the European Economic Association
IS - 4
ER -