NB20-13: Effects of Public Sector Retirement and Health Care Changes on Social Security and Labor Supply

Policymakers in many states have been actively trying to reduce public pension and retiree health liabilities in response to significant levels of underfunding. Such changes can affect Social Security claiming and labor supply because they alter the returns to additional work. A few papers have leveraged administrative data from a specific state that experienced a change in retirement or health care benefits and examined its effect on public sector employment (Brown 2013, Fitzpatrick 2014, Leiserson 2013, Ni and Podgursky 2016, Salinas 2017). Our study will use more recent and arguably exogenous sources of variation in the generosity and availability of pensions and retiree health insurance of public sector employers, examining additional sources of survey data, looking at Social Security claiming as an outcome, analyzing interactions between pension benefits and retiree health benefits. We will produce a database of changes over the last two decades in retirement benefits and retiree health care benefits and a research manuscript that details our investigation of the effects of these changes on Social Security claiming and labor supply behavior using publicly available data sources.