Do Older Workers Respond to Changes in Social Security Benefits? A Look at the Time Series Evidence

Jay Stewart


This paper uses time series data to examine the effect of Social Security on the participation rates of older men. The evidence indicates that changes in the level of Social Security benefits have a large affect on the participation rates of 62- to 64- and 65- to 69-year-old men, and that this effect occurs with a lag of 1-3 years. Increases in Social Security benefits accounted for 37 percent of the decrease in participation rates of 65- to 69-year-old men between 1954 and 1990. For 62- to 64-year-old men, Social Security accounts for 40 percent of the decline since 1963.