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Volume 13 Issue 1 - October 2012

MRRC Researchers Present Findings

MRRC researchers presented preliminary findings at the RRC conference. We present brief summaries below. 

John Bailey Jones presented findings from Medicaid Insurance and Redistribution in Old Age, cowritten with Mariacristina De Nardi and Eric French. They examine data on the insurance and redistributive properties of Medicaid during old age. Preliminarily, they find that the poorest households are much more likely to receive Medicaid transfers, but the amounts they receive are relatively small. Wealthier households, however, "are less likely to receive Medicaid payouts, but when they do these pay-outs are very big and correspond to severe and expensive medical conditions." They conclude that Medicaid is "an effective insurance device for the poorest," and at the same time, it offers "valuable insurance to the rich by insuring them against catastrophic medical conditions."

Michael Hurd presented Personality Traits and Economic Preparation for Retirement, coauthored with Angela Lee Duckworth and David Weir. The authors examine the effect of personality traits on the probability of being economically prepared for retirement. Their preliminary results show that for married people, "conscientiousness has a significant positive effect on economic preparation for retirement for husbands," while "neuroticism has a significant negative effect on preparation for wives." For singles, "neuroticism has a significant negative effect on preparation for all singles," while "extraversion has a negative effect for males."

Thomas L. Steinmeier discussed Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving¸ coauthored by Alan L. Gustman. In their draft conference paper, they develop a life-cycle model to determine "the effects of several potential changes in the Social Security system, including changes in the early entitlement and normal retirement ages and the elimination of the payroll tax for individuals past the normal retirement age." They find that increasing the early retirement age would do the most to encourage greater labor force participation. And, increasing the full retirement age would have the greatest effect on solvency.

Nicole Maestas talked about findings from Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants. Maestas and her coinvestigators tested whether the length of the SSDI application and decision process affects the future employment of applicants. They find that the differences between examiners notably impacts applicants’ total processing times. Moreover, they state that "longer processing times significantly reduce the employment and earnings of SSDI applicants in the years after their initial decision."

In her presentation on the paper, Using the 2009 CPS-ASEC-SSA Matched Dataset to Show Who Is and Is Not Captured in the Official Six-Question Sequence on Disability, Jennifer R. Tennant stated that the current survey questions in the Current Population Survey do not query respondents about work activity limitations. Tennant and her coauthors, Richard V. Burkhauser, T. Lynn Fisher and Andrew J. Houtenville demonstrate that the current 6-question sequence determining disability status captures only 66 percent of the US disability population. When a work limitation question is added, the SSI/SSDI population grows by 23 percent.

David Powell discussed his study with Abby Alpert, Tax Elasticity of Labor Earnings for Older Individuals. Studying workers ages 55-74, they find evidence that men retire in response to high taxes, but do not find similar retirement effects for women. Powell and Alpert state that "elimination of the employee portion of payroll taxes for our population would decrease the percentage of workers dropping out of the labor force by 1 percentage point, a 4 percent decrease."

David Neumark presented Barriers to Later Retirement: Increases in the Full Retirement Age, Age Discrimination, and the Physical Challenges of Work, coauthored with Joanne Song. The authors study how age discrimination protections influence the labor market transitions of workers directly affected by increases in the FRA. While in their 2011 paper they found increases in employment among those "caught" by increases in the FRA, in their 2012 paper, they "ask how the employment increases come about. Is it through continued employment at the same employer, hiring by new employers, or re-entry into employment?"