Boston University

To measure the work disincentives facing older Americans arising from America’s major fiscal programs and provisions

  • Amount $704,982
  • City Boston, MA
  • Investigator Laurence Kotlikoff
  • Year 2015
  • Program Research
  • Sub-program Working Longer

This grant funds a study by Lawrence Kotlikoff of Boston University and Alan Auerbach of the University of California, Berkeley that will measure the work disincentives facing older Americans arising from our country’s almost 40 major fiscal programs and provisions. Kotlikoff and Auerbach will study the combined effects of all these programs to understand the marginal tax rate on income earned by older workers at different ages and to assess their combined potential to limit the work and incomes of the elderly. Using detailed data from several public datasets and advanced financial analysis software, the research team will test several hypotheses, including whether there are high median net marginal tax rates on the labor supply of the elderly at all levels of remaining lifetime resources; whether there exists a large dispersion in net marginal tax rates even holding remaining resources fixed, whether there are significant increases in sustainable living standards associated with the elderly working longer, and whether major impacts of the fiscal system on the elderly’s labor supply can be reduced with revenue-neutral fiscal reforms that preserve fiscal progressivity.

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