Donald E. Wise

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NBER Working Papers and Publications

1981Social Security, Bequests, and the Life Cycle Theory of Saving: Cross-Sectional Tests
with Alan S. Blinder, Roger H. Gordon: w0619
This paper studies the asset holdings of white American men near retirement age. Assets as conventional defined show no tendency to decline with age, in apparent contradiction of the life-cycle theory of saving. However, a broadened concept of assets which includes expected future pension benefits (both public and private) and expected future earnings ("human wealth") does decline more or less as predicted by the theory. No matter how they are defined, assets are a decreasing function of the number of children--which casts doubt on the strength of the bequest motive. Finally, financial assets and social security wealth fail to exhibit the inverse relationship suggested by Feldstein's displacement hypothesis. To investigate these issues econometrically, an equation for assets is developed f...

Published: Blinder, Alan S., Roger H. Gordon and Donald E. Wise. "Social Security, Bequests, and the Life Cycle Theory of Savings Cross Sectional Tests." Determinants of National Savings and Wealth, edited by Franio Modigliani and Richard Hemming, International Economic Association, 1983.

October 1980Reconsidering the Work Disincentive Effects of Social Security
with Alan S. Blinder, Roger H. Gordon: w0562
This paper shows that, contrary to commonly held views, the provisions of the social security law actually provide strong work incentives for older men. The reason is that, for most workers, higher current earnings lead to higher future social security benefits. These incentives have been particularly strong for workers under 65 years of age and, although they will be reduced somewhat when the 1977 amendments to the social security law become fully effective, they will remain substantial. The findings raise serious questions about recent econometric work attributing the decline in labor force participation rates of older men to the social security system.

Published: Blinder, Alan S.; Gordon, Roger H. and Wise, Donald E. "Reconsidering the Work Disincentive Effects of Social Security." National Tax Journal, Vol. XX XIII, No. 4, (December 1980), pp. 431-442.

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