MINIMUM WAGES AND RETIREMENT

The authors study the effect of the minimum wage on the employment outcomes and Social Security claiming of older US workers from 1983 to 2016. The probability of work at or near the minimum wage increases substantially near retirement, and previous researchers and policies suggest that older worker...

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Bibliographic Details
Published in:Industrial & labor relations review 2020-01, Vol.73 (1), p.153-177
Main Authors: BORGSCHULTE, MARK, CHO, HEEPYUNG
Format: Article
Language:English
Subjects:
Beneficiaries
Delayed
Dislocated workers
Earnings
Economic models
Employment
Labor force
Labor relations
Labor supply
Minimum wage
Older people
Retirement
Social security
Vulnerability
Wages & salaries
Workers
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Summary:The authors study the effect of the minimum wage on the employment outcomes and Social Security claiming of older US workers from 1983 to 2016. The probability of work at or near the minimum wage increases substantially near retirement, and previous researchers and policies suggest that older workers may be particularly vulnerable to any disemployment effects of the minimum wage. Results show no evidence that the minimum wage causes earlier retirements. Instead, estimates suggest that higher minimum wages increase earnings and may have small positive effects on the labor supply of workers in the key ages of 62 to 70. Consistent with increased earnings and delayed retirement, higher minimum wages decrease the number of Social Security beneficiaries and amount of benefits disbursed. The minimum wage appears to increase financial resources for workers near retirement.
ISSN:0019-7939
2162-271X
DOI:10.1177/0019793919845861