Patricia Tong

RAND Corporation
1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
Fax: Financial Economist

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: RAND Corporation

NBER Working Papers and Publications

February 2019Market Inefficiency and Household Labor Supply: Evidence from Social Security’s Survivors Benefits
with Itzik Fadlon, Shanthi P. Ramnath: w25586
We study the effects of the Social Security survivors benefits program on household labor supply and the efficiency implications for insurance and credit markets. We use U.S. population tax records and exploit a sharp age discontinuity in benefit eligibility for identification. We find that eligibility induces considerable reductions in labor supply both among newly-widowed households in the immediate post-shock periods and among already-widowed households whose benefit receipt is entirely predictable. The evidence points to liquidity constraints, rather than myopia, as a leading operative mechanism underlying household responses to anticipated benefits. Our findings identify important inefficiencies in the life insurance market and in the allocation of credit. Our results further highligh...

National Bureau of Economic Research
1050 Massachusetts Ave.
Cambridge, MA 02138

Twitter RSS

View Full Site: One timeAlways