Are Policymakers Overlooking a Second Earnings Test?

Brief

Are Policymakers Overlooking a Second Earnings Test?

Abstract

In their efforts to reform Social Security, policymakers have started focusing their attention on the Social Security earnings test, which reduces recipients benefits in proportion to their wages. The authors of this essay claim, however, that in these reforms, policymakers have ignored a second earnings test that was established in the 1960s. This second test, they contend, is better suited for todays labor market than the first and should thus be implemented as the first earnings test becomes more and more obsolete.

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