آیا قوانین قوی تر تبعیض سن اصلاحات تامین اجتماعی را موثرتر می کند؟
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|24491||2013||16 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Public Economics, Volume 108, December 2013, Pages 1–16
Supply-side Social Security reforms intended to increase employment and delay benefit claiming among older individuals may be frustrated by age discrimination. We test for policy complementarities between these reforms and demand-side efforts to deter age discrimination, specifically studying whether stronger state-level age discrimination protections enhanced the impact of the 1983 Social Security reforms that increased the full retirement age (FRA) and reduced benefits. The evidence indicates that, for older individuals for whom early retirement benefits fell and the FRA increased, stronger state age discrimination protections were associated with delayed benefit claiming and increases in employment, with benefit claiming pushed from 65 to the new FRA, and increased employment after age 62 and age 65 that is then curtailed at the new FRA.
In coming decades the share of the population aged 65 and over (“seniors”) will rise sharply – from 17% of those aged 20 and over in 2000, to 28% in 2050 (projected) – and will approach equality with the share aged 45–64 by the middle of the century (Neumark, 2008). This aging of the population will pose fundamental public policy challenges. Most significantly, the very low employment rate of seniors implies slowing labor force growth relative to population, and a rising dependency ratio. This creates an imperative to increase the employment of older individuals, thereby lowering dependency ratios, raising tax revenues, and – as programs are currently structured – decreasing public expenditures on health insurance, retirement benefits, and income support. Population aging and the need to increase employment of seniors are most strongly tied to the solvency of Social Security, leading to numerous reforms intended to increase the employment (or hours) of those who would otherwise retire, including: reforms that lowered benefits at the early retirement age of 62 and raised the full retirement age (FRA) at which full benefits are available from 65 to 67 beginning with the 1938 birth cohort that reached age 65 in 2003, with the FRA rising fairly quickly to 66 for the 1943–1954 birth cohorts (American Academy of Actuaries, 2002 and Munnell et al., 2004); and changes in taxation of benefits including reductions in the marginal tax rate on earnings of Social Security recipients in excess of the earnings cap, increases in the exempt amount of earnings (the cap), and broadening of the ages not subject to the earnings test (Friedberg, 2000). Additional changes are likely to be considered as part of efforts to shore up the solvency of Social Security or to reform the system. Efforts to delay Social Security claiming and retirement of older workers, however, may be frustrated by age discrimination. In particular, if age discrimination deters the employment of older workers, especially beyond what has until recently been the “normal” retirement age of 65, then supply-side incentives – via changes to Social Security as well as other policies – may be rendered less effective or ineffective. Research shows that the federal Age Discrimination in Employment Act (ADEA) and state age discrimination laws have increased employment of protected workers (Neumark and Stock, 1999 and Adams, 2004). This motivates the key question this paper addresses — whether there are policy complementarities between supply-side efforts to increase labor supply and demand-side efforts to deter age discrimination. Specifically, we study whether stronger age discrimination protections at the state level enhanced the impact – in terms of delaying claiming Social Security benefits and encouraging continued employment – of the 1983 Social Security reforms that took effect in the last decade, increasing the FRA and reducing benefits when they are claimed before the FRA. State-level variation in age discrimination laws allows us to compare responses to these reforms in states with different age discrimination protections. It might be natural to expect this kind of positive complementarity, but the reality is more complex. There is evidence suggesting that age discrimination remains pervasive, especially with regard to hiring older workers (e.g., Adams, 2002, Adams, 2004, Bendick et al., 1996, Bendick et al., 1999, Hirsch et al., 2000, Hutchens, 1988, Johnson and Neumark, 1997, Kite et al., 2005 and Lahey, 2008a).1 Because in hiring cases it is difficult to identify a class of affected workers, and economic damages are smaller than in termination cases, age discrimination laws may not be effective in combating discrimination in hiring. And if age discrimination laws mainly raise the costs of terminating older workers, they could end up deterring hiring (Bloch, 1994, Lahey, 2008b and Posner, 1995).2 In this scenario, given that a good share of increased employment among seniors might be expected to come from new employment in part-time or shorter-term “partial retirement” or “bridge jobs,” rather than from continued employment of workers in their long-term career jobs (e.g., Cahill et al., 2006 and Johnson et al., 2009), age discrimination laws might not enhance the effects of the Social Security reforms.
نتیجه گیری انگلیسی
In states with stronger protections against age discrimination in the labor market, older individuals were more responsive to the 1983 Social Security reforms that lowered early retirement benefits and increased the full retirement age (FRA). Specifically, where the state law applies to small firms not covered by the ADEA, for cohorts affected by the reforms employment increased at age 65 and then subsequently declined at the new FRA, consistent with shifting the exit from employment from 65 to the FRA. Similar changes in employment at age 65 and the new FRA were evident where state laws provided stronger remedies (compensatory or punitive damages). In states with stronger remedies, full-time employment of those aged 62 and over also increased. And similarly, echoing the employment results, benefit claiming shifted more from age 65 to the new FRA in these states. This evidence is broadly consistent with the idea that stronger state age discrimination protections enhanced the effects of the Social Security reforms, complementing the supply-side incentives created by these reforms by reducing demand-side barriers. Further evidence on the reduction of demand-side barriers comes from studying employment transitions and hiring. Specifically, for 65 year-olds for whom the FRA increased, stronger state age discrimination protections appear to enable labor market transitions that permit people to remain at work, through either moving to a new employer or re-entering employment. If, as some of the results suggest, stronger age discrimination laws increased hiring of those older workers who were trying to work longer in response to these Social Security reforms, then these stronger age discrimination laws may make extended work lives more viable by boosting transitions to bridge or partial retirement jobs, in contrast to older workers simply staying a bit longer in their career jobs. At the same time, we do not want to overstate the evidence. In our view the preponderance of the evidence points this way, but some of the results are less consistent with this interpretation. It may be hard to get firmer answers until we have more evidence on people for whom the FRA has increased. The employment and hiring findings are particularly significant. Because benefits taken before the FRA are actuarially adjusted, whether or not workers begin to take benefits before the FRA may have little impact on the financial solvency of Social Security.44 However, if people work longer, they pay taxes into the system for a longer period, which has direct financial implications. As Mastrobuoni, studying the same policy change, puts it, “An increase in labor force participation generates more contributions, which are the trust fund's main source of revenue” (2009, p. 1224). Interestingly, the results suggest that only in states with stronger age discrimination protections was there a positive employment effect from increases in the FRA. And working longer should also have positive ramifications for old-age support from private savings, by increasing earnings on these savings and reducing the period in which retirees rely on these savings. This conclusion suggests that Social Security reforms on the supply side intended to enhance incentives for older individuals to remain in the workforce – whether in the form of the second scheduled phase of increases in the FRA, or other changes in incentives – will be more effective if public policy reduces demand-side barriers to the employment of older workers that stem from discrimination. The states that currently provide stronger age discrimination protections may provide a model for changes in the ADEA that could enhance the effectiveness of future Social Security reforms. Given that these supply-side reforms impose costs on older individuals – such as the lower actuarially adjusted benefits if they claimed prior to the FRA – it seems reasonable to try to eliminate demand-side barriers to older workers' employment that would otherwise necessitate stronger supply-side changes to achieve solvency of the Social Security system. Finally, note that the empirical conclusion that stronger state age discrimination laws can enhance the effects of Social Security reforms does not hinge on whether there is in fact age discrimination that is combated by stronger age discrimination laws, or whether instead there is no age discrimination but these laws lead to favoritism for older workers. Of course if the latter characterization is true, there might be other arguments against increasing the strength of age discrimination laws.