THE EFFECTS OF THE SOCIAL SECURITY SYSTEM ON THE LABOR FORCE EFFORT OF OLDER MALES

This research examines the relationship between the United States social security system and the labor force effort of elderly white males. This relationship is modeled over the individual's life-cycle. The model is used to predict effects and these predictions are compared to empirical results. Particular emphasis is placed on the effects of the social security earnings tax. The empirical results confirm the theoretical notion that the earnings tax reduces labor force effort later in life. However, the predictions and results imply that changing no single variable can overcome the projected shortfall in revenue for the social security trust fund.