Table 7.
Fiscal costs and benefits of ERA increase
| Men |
Women |
|||||||
|---|---|---|---|---|---|---|---|---|
| Δretirement benefits received (1) | Δtaxes paid (2) | ΔUI benefits received (3) | ΔDI benefits received (4) | Δretirement benefits received (5) | Δtaxes paid (6) | ΔUI benefits received (7) | ΔDI benefits received (8) | |
| pre-ERA | ||||||||
| I(age<ERA-2) | −236*** (54) | −30 (34) | 139** (66) | −102*** (35) | −58*** (19) | −16* (9) | ||
| I(age<ERA-1.5) | −117** (47) | −165*** (23) | 63* (34) | −28 (34) | −167*** (14) | −13 (9) | ||
| I(age<ERA-l) | −96** (48) | −246*** (34) | 46 (38) | −25 (35) | −254*** (26) | 3 (10) | ||
| I(age<ERA-0.5) | −157*** (56) | −205*** (27) | 104** (42) | −55 (36) | −228*** (24) | 4 (10) | ||
| I(age<ERA) | −4,915*** (123) | 1,787*** (86) | 1,891*** (76) | 233*** (37) | −3,333*** (154) | 1,269*** (62) | 1,186*** (81) | 21** (9) |
| post-ERA | ||||||||
| I(age<ERA+0.5) | −810*** (74) | 375*** (50) | 108*** (33) | 147*** (43) | −699*** (26) | 356*** (30) | 97*** (19) | 15 (11) |
| I(age<ERA+l) | −305*** (61) | 6 (58) | 61** (26) | 121*** (40) | −428*** (28) | 172*** (27) | 92*** (18) | 11 (9) |
| I(age<ERA+1.5) | −200*** (60) | −5 (46) | 66*** (23) | 54 (33) | −288*** (42) | 115*** (30) | 84*** (17) | −9 (10) |
| I(age<ERA+2) | −55 (40) | −103** (48) | 23 (14) | 27 (34) | −238*** (24) | 8 (29) | 119*** (15) | −20 (14) |
| R2 | 0.362 | 0.452 | 0.088 | 0.236 | 0.522 | 0.561 | 0.059 | 0.120 |
| #Obs. | 8,731,826 | 8,731,826 | 8,731,826 | 8,731,826 | 9,391,883 | 9,391,883 | 9,391,883 | 9,391,883 |
| #Individuals | 440,537 | 440,537 | 440,537 | 440,537 | 495,714 | 495,714 | 495,714 | 495,714 |
Notes: This table displays the impact of the ERA increase on retirement benefits received, taxes paid, UI benefits received, and DI benefits received. The estimates are based on equation (1) when we include indicator variables for whether an individual's age is below ERA-2 years, ERA-1.5 years, ERA-1 year, ERA-0.5 years, ERA, ERA+0.5 years, ERA+1 year, ERA+1.5 years, and ERA+2 years. In columns (1) and (5) we only include the indicators ERA, ERA+0.5 years, ERA+1 year, ERA+1.5 years, and ERA+2 years because individuals only become eligible for retirement benefits at the ERA. Standard errors, in parentheses, are clustered at the year-quarter of birth. Coefficient and standard errors are multiplied by 100 and should be interpreted as percentage points. Controls in all specifications include dummies for age in months, dummies for year-quarter, experience in last 15 years, blue-collar status, number of insurance years, annual earnings, average earnings in best 15 years, expected UI benefits, dummies for weeks of UI eligibility (20, 30, 39, 52, 78 weeks), expected retirement benefits, number of sick leave days between ages 45-49 for women and ages 50-54 for men, dummies for industry, dummies for birth cohort at a quarterly frequency, dummies for birth cohort interacted with a second-order polynomial in calendar time, and dummies for age in months interacted with a second-order polynomial in calendar time. The time period is 1997-2010. Significance levels:
1%
5%
10%.