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Do stronger age discrimination laws make Social Security reforms more effective? (Nuemark & Song 2013)

Absence of conflict of interest.

Citation

Neumark, D., & Song, J. (2013). Do stronger age discrimination laws make Social Security reforms more effective? Journal of Public Economics, 108, 1-16.

Highlights

  • The study examined whether the strength of state age discrimination protections affected rates of Social Security benefit claiming and employment outcomes of older workers.
  • The study used a nonexperimental design and the data on Social Security claiming and employment outcomes from the Health and Retirement Study (HRS) to estimate the impacts.
  • The study found that among older men affected by the 1983 Social Security reform, age discrimination protections were associated with increases in employment rates between age 62 and the full retirement age and delayed benefit claiming.
  • The quality of casual evidence presented in this report is moderate because the study was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to state age discrimination laws, but other factors might also have contributed.

Intervention Examined

The 1983 Social Security Reform

Features of the Intervention

The authors examined three characteristics of state age discrimination laws: whether they apply to firms with fewer than 10 employees; whether they allow compensatory and/or punitive damages with or without proof of intent; and whether they allow longer than 300 days to file a claim and have their own enforcement agencies. States that have these types of statutes are considered to have stronger age discrimination laws.

Features of the Study

The study used a nonexperimental design (difference-in-difference-in-differences models) that examined how the strength of age discrimination laws impact Social Security claims and employment outcomes of individuals affected by the 1983 Social Security reform that reduced early retirement benefits and raised the full retirement age. The authors assessed the effect of each of the three types of age discrimination laws for men age 62 and older, men age 65 and older, and men at the full retirement age and older. The study sample consisted of 29,330 men who were born between 1931 and 1943. The study used data on Social Security claiming and employment outcomes from the HRS, a study that has been collecting health and employment information from participants every two years since 1992. The authors constructed the measures of the strength of state age discrimination laws based on the data from LexisNexis, Westlaw, HeinOnline, state agency websites, and other articles describing the laws.

Findings

Employment 

  • The authors found that stronger state age discrimination laws were associated with a 15 percentage point increase in the overall rate of employment for men age 65 and older, but a 13 percentage point decrease in the overall employment rate for men at the full retirement age or older.

Public benefit receipt

  • The authors found that stronger state age discrimination laws were associated with delays in claiming benefits to the new full retirement age.

Considerations for Interpreting the Findings

The study is a nonexperimental analysis that used placebo tests to demonstrate that the treatment and comparison groups had similar employment rates before the policy change.

Causal Evidence Rating

The quality of casual evidence presented in this report is moderate because the study was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to state age discrimination laws, but other factors might also have contributed.

Reviewed by CLEAR

September 2019

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