![handle is hein.congrec/cbo10127 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Robert D. ReIschauser
U.S. CONGRESS DIrector
WASHINGTON, D.C. 20515
MEMORANDM May 23, 1989
TO: Sandy Wise
FROM; Ralph Smith
Bob Williams
SUBJECT: The Incomes of Workers Affected by the Earnings Test
Compared with the Incomes of Other Elderly Groups
The table attached to this memorandum uses data from the most recent
Current Population Survey to compare the 1987 incomes of workers ages 65 to 69
who are affected by the Social Security earnings test with those of other elderly
groups. The results for workers ages 65-69 are similar to those reported for 1986
in The Social Security Earnings Test and Options for Change,* a Congressional
Budget Office staff working paper prepared for your Subcommittee in September
1988. Our findings are also subject to the same limitations detailed in that paper.
As you requested, the current analysis goes beyond the earlier one by comparing the
incomes of workers ages 65 to 69 with the incomes of people age 70 or older.
This memorandum does not address other issues relevant to the debate over
proposals to relax or eliminate the Social Security earnings test. For example, we
do not address issues concerning the marginal tax rate on earnings faced by some
elderly people as a result of the earnings test, the effects of the test on the supply
of labor, the administrative complexity of the test, or the budgetary effects of the
proposals.
Methods. Data. and Limitations of he AMajysis
This analysis is based on data from the March 1988 Current Population Survey
(CPS), which contains information about the incomes received during calendar year
1987 for a nationally representative sample of the noninstitutionalized population.j/
1 The focus of this analysis is people, rather than family units. These findings,
therefore, differ from those reported in Committee on Ways and Means,]Ib.
Economic Status of the Eiderly, WMCP: 10 1-7, 100:1 (May 23, 1989),
prepared by the Congressional Budget Office at the request of the
Subcommittee on Social Security. In that Committee Print, the units
examined were the elderly who lived alone or only with their spouses.
(Married couples were included if either spouse was at least age 65.) For
this memorandum, all people age 65 or over, not living in institutions such
as nursing homes, were included.
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