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Declining social security benefits keep older men in workforce
Date:5/4/2010

The decline in the generosity of Social Security benefits for workers who recently reached their 60s has been the leading cause of the trend toward delayed retirement of older men, a new national study suggests.

Between the periods of 1988-1992 and 2001-2005, there was a 4.7 percentage point increase in the number of men aged 55 to 69 in the workforce.

The new study found that between 25 and 50 percent of that increase can be explained by declining Social Security benefits, said David Blau, co-author of the study and professor of economics at Ohio State University.

"Older individuals don't get the same level of Social Security benefits when they retire as they once did, and that has been one reason why a significant number of men continue to work longer than they otherwise might have," Blau said.

These results give a glimpse of what may happen if the federal government opts to further decrease benefits to shore up Social Security's bottom line, as many experts expect.

"This issue is very important because Social Security is in financial imbalance, and one way to correct that imbalance is for people to work longer and delay receiving their benefits," Blau said.

"These results suggest that less generous benefits have the desired effect of inducing people to work longer."

Blau conducted the study with Ryan Goodstein of the Federal Deposit Insurance Corporation. Their study appears in a recent issue of The Journal of Human Resources.

The researchers use data from a variety of sources, including the Social Security Administration, the Current Population Survey and the Survey of Income and Program Participation. With this data, they were able to look at labor force participation of men aged 55 to 69 between the years of 1962 and 2005.

One contribution of this study is that it looks at labor force participation rates for more than 40 years, so that long-term trends can be identifie
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Contact: David Blau
Blau.12@osu.edu
614-292-2009
Ohio State University
Source:Eurekalert

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