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The effect of means-tested income support for the elderly on pre-retirement saving: evidence from the SSI program in the U.S.

Authors
Journal
Journal of Public Economics
0047-2727
Publisher
Elsevier
Publication Date
Volume
68
Issue
2
Identifiers
DOI: 10.1016/s0047-2727(98)00004-8
Keywords
  • Income Support
  • Aged
  • Means-Tested
Disciplines
  • Logic

Abstract

Abstract We attempt to draw inferences about behavioral responses to means-tested income support for the elderly by examining the effects on saving of the Supplemental Security Income (SSI) program for the aged in the U.S. Part of this program provides payments to the poor elderly, operating as a means-tested public retirement program. We exploit state-level variation in SSI benefits to estimate the effects of SSI on saving, using data from the 1984 Survey of Income Program Participation. We find evidence that high SSI benefits reduce saving among households with heads who are approaching the SSI eligibility age and are likely participants in the program.

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