Work in Progress:
“Working on the Railroad All the Live-Long Life? The Effect of Federalizing Railroad Pensions on Retirement”
The Railroad Retirement Act (RRA) of 1934 set up the first federally administered, non-governmental retirement system in the United States, replacing private, mostly noncontributory, and unreliable pension systems covering over 5% of nonagricultural employment. This paper examines how changes to the minimum retirement age and benefit formula of railroad pensions affected retirement decisions of railroad workers. Using linked 1930-1940 Census data, I employ a cohort-based research design, which leverages individual level variation in 1930 industrial employment, comparing 1940 labor force exit of railroad workers to other workers covered by industrial pension systems. Railroad workers differentially exited the labor force only at eligible ages, with workers 65-70 roughly 13 percentage points more likely to retire relative to similar non-railroad workers, or a 25% increase relative to average 1940 retirement. Higher eligibility effects at age 65 for lower income workers is consistent with a lower option value of continued work for these workers.
“From Assistance to Insurance: 1950 Social Security Expansions and the Decline of Elderly Public Assistance” (Joint with Daniel Fetter)
The Social Security Amendments of 1950 expanded coverage to approximately 10 million new workers and increased average payments by 77%, constituting one of the largest expansions in the history of the program. Using newly digitized data on program recipiency/payments and state variation in new coverage in a difference in differences design, this paper examines how the expansions shifted caseloads from the elderly public assistance program Old Age Assistance (OAA), crowding out state elderly welfare expenditure. Due to the “new start formula”, increased coverage led quickly to increased recipiency, which mechanically reduced OAA caseloads. We show that states with greater increases in coverage experienced higher growth in Social Security caseloads and declines in OAA caseloads. By 1972, 1 OAA case was removed for roughly each 4 new Social Security cases, and states had saved nearly 4% of own source expenditure. State savings were driven by lower caseloads, not by lower payments per recipient.
“Who Benefits from Federal Welfare Spending? Evidence from the Introduction of Progressive Cost Sharing” (Joint with Andrew Goodman-Bacon)
In 1958 the federal government began to provide more generous financial matching for welfare programs in poorer states than in richer ones. The goal was to encourage the least generous states to pay higher benefits. We evaluate the effect of this reform on benefits, on state savings, and other state tax/spending policies.
You can follow Matt on Social Media, and he'll (probably) return the favor!
Twitter
LinkedIn
“Working on the Railroad All the Live-Long Life? The Effect of Federalizing Railroad Pensions on Retirement”
The Railroad Retirement Act (RRA) of 1934 set up the first federally administered, non-governmental retirement system in the United States, replacing private, mostly noncontributory, and unreliable pension systems covering over 5% of nonagricultural employment. This paper examines how changes to the minimum retirement age and benefit formula of railroad pensions affected retirement decisions of railroad workers. Using linked 1930-1940 Census data, I employ a cohort-based research design, which leverages individual level variation in 1930 industrial employment, comparing 1940 labor force exit of railroad workers to other workers covered by industrial pension systems. Railroad workers differentially exited the labor force only at eligible ages, with workers 65-70 roughly 13 percentage points more likely to retire relative to similar non-railroad workers, or a 25% increase relative to average 1940 retirement. Higher eligibility effects at age 65 for lower income workers is consistent with a lower option value of continued work for these workers.
“From Assistance to Insurance: 1950 Social Security Expansions and the Decline of Elderly Public Assistance” (Joint with Daniel Fetter)
The Social Security Amendments of 1950 expanded coverage to approximately 10 million new workers and increased average payments by 77%, constituting one of the largest expansions in the history of the program. Using newly digitized data on program recipiency/payments and state variation in new coverage in a difference in differences design, this paper examines how the expansions shifted caseloads from the elderly public assistance program Old Age Assistance (OAA), crowding out state elderly welfare expenditure. Due to the “new start formula”, increased coverage led quickly to increased recipiency, which mechanically reduced OAA caseloads. We show that states with greater increases in coverage experienced higher growth in Social Security caseloads and declines in OAA caseloads. By 1972, 1 OAA case was removed for roughly each 4 new Social Security cases, and states had saved nearly 4% of own source expenditure. State savings were driven by lower caseloads, not by lower payments per recipient.
“Who Benefits from Federal Welfare Spending? Evidence from the Introduction of Progressive Cost Sharing” (Joint with Andrew Goodman-Bacon)
In 1958 the federal government began to provide more generous financial matching for welfare programs in poorer states than in richer ones. The goal was to encourage the least generous states to pay higher benefits. We evaluate the effect of this reform on benefits, on state savings, and other state tax/spending policies.
You can follow Matt on Social Media, and he'll (probably) return the favor!