The distortion of the labor/leisure choice by social security during the period the earnings test is in effect is well known. This paper, using a life-cycle asset maximization approach to social security acceptance, shows that the earnings test is not a sufficient cause for such a distortion in the constrained period or over the life cycle. We use time-series analysis to test the net empirical importance of the substitution and wealth effects associated with social security on the market work of younger men and find that hours worked per week would have fallen from 2 to 3 hours since 1936 without the present social security system. Such findings suggest that large savings effects associated with social security are over-estimates.

Traditional cross-sectional measures find greater inequality in the United States than in industrialized Western European countries, but are unable to distinguish transitory from permanent inequality. With longitudinal data, we measure cross-sectional inequality during the 1980s using the Shorrocks measure of income stability to find the degree to which single-period measures exaggerate permanent inequality. Surprisingly, given the smaller social welfare system and the less restrictive labor markets in the United States, we find that both single-period inequality and the share of that inequality that persists over time are greater in the United States than in Germany.

Richard V. Burkhauser, James T. Wilkinson, The Effect of Retirement on Income Distribution: A Comprehensive Income Approach, The Review of Economics and Statistics, Vol. 65, No. 4 (Nov., 1983), pp. 653-658

We estimate the employment effects of federal minimum wage increases using monthly Current Population Survey (CPS) data from 1979 through 1997. We find that the empirical differences in the new minimum wage literature based on CPS data primarily can be traced to alternative methods of controlling for macroeconomic conditions. We argue that the macroeconomic controls commonly included in models where no employment impact is found are inappropriate. We consistently find a significant but modest negative relationship between minimum wage increases and teenage employment using alternative controls or allowing employer responses to the policy to occur with some delay.

Old age, like beauty, is in the eye of the beholder. If by old age we mean the period of life characterized by a significant reduction in market work, then a major phenomenon of the last three decades has been that the old among us have gotten considerably younger. Here we briefly review this phenomenon, discuss a parallel growth in broadly defined income support, both public and private, and then provide a mechanism for relating the two.

The distortion of the labor/leisure choice by social security during the period the earnings test is in effect is well known. This paper, using a life-cycle asset maximization approach to social security acceptance, shows that the earnings test is not a sufficient cause for such a distortion in the constrained period or over the life cycle. We use time-series analysis to test the net empirical importance of the substitution and wealth effects associated with social security on the market work of younger men and find that hours worked per week would have fallen from 2 to 3 hours since 1936 without the present social security system. Such findings suggest that large savings effects associated with social security are over-estimates.

Recent research on levels and trends in the United States in income inequality vary substantially in how they measure income. We show the sensitivity of alternative income measures in capturing income trends using a unified data set. Focusing solely on market income or including realized taxable capital gains based on IRS tax return data in more comprehensive household income measures will dramatically increase inequality growth compared to capital gains measures more in keeping with Haig-Simons principles. Using a measure of yearly accrued capital gains dramatically reduces observed growth in income inequality across the distribution, but also equalizes income growth since 1989.