Book Description

This dissertation is comprised of three freestanding chapters, each of which studies a policy-motivated question related to the economics of aging. The first two chapters provide new evidence from Denmark on how social security policy impacts retirement, labor supply, and savings decisions of older workers, and the last chapter evaluates a U.S. Medicare policy that aims to improve access to healthcare for older Americans. Chapter 1 studies how the provision of public pension benefits impacts private savings. We use administrative data and a regression discontinuity design to identify the causal effects of a Danish reform that increased social security eligibility ages. We find no evidence of anticipatory savings responses after the announcement of the reform, whereas we find large increases in savings in retirement accounts when delayed benefit eligibility induces extended employment. The evidence suggests inertia is a leading mechanism: individuals continue to work and continue to save, and we show how employer default contribution rate policies mediate responses to the national reform. Chapter 2 studies how social security influences joint retirement of couples. We first document joint retirement behavior around the early pension eligibility age in Denmark: we show that spouses are discontinuously more likely to retire when their partners first become eligible for social security benefits. We then explore underlying mechanisms and find age differences within couples to be crucial determinants of joint retirement behavior, which is primarily driven by older spouses continuing to work until their younger partners reach pension eligibility age. Chapter 3 studies a U.S. Medicare policy that delivers bonus payments to physicians for practicing in areas with few doctors per capita. Using several sources of data from the Centers for Medicare and Medicaid Services and a matched difference-in-differences design, we find that counties designated as official shortage areas experience an increase in the number of early-career primary care physicians. However, we find no evidence that later-career physicians respond to shortage area designations, and we highlight how targeting bonus payments towards newer physicians may thus improve the effectiveness and cost-efficiency of the policy.