Household Labor Supply and the Value of Social Security Survivors Benefits
American Economic Review
vol. 114,
no. 5, May 2024
(pp. 1248-80)
Abstract
We combine quasi-experimental variation in spousal death and age eligibility for survivors benefits using US tax records to study the effects on American households' labor supply and the design of social security's survivors insurance. Benefit eligibility at the exact age of 60 induces sharp reductions in the labor supply of newly widowed households, highlighting the value of survivors benefits and the liquidity they provide following the shock. Among eligible widows, the spousal death event induces no increases in labor supply, suggesting little residual need to self-insure. Using theory, we underscore the program's protective insurance role and its high valuation among survivors.Citation
Coyne, David, Itzik Fadlon, Shanthi P. Ramnath, and Patricia K. Tong. 2024. "Household Labor Supply and the Value of Social Security Survivors Benefits." American Economic Review, 114 (5): 1248-80. DOI: 10.1257/aer.20190813Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- G22 Insurance; Insurance Companies; Actuarial Studies
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- H55 Social Security and Public Pensions
- J16 Economics of Gender; Non-labor Discrimination
- J22 Time Allocation and Labor Supply