Abstract
In this paper we focus on an age restriction for remarriage in the Social Security system to determine if individuals respond to economic incentives for marriage. Aged widow(er) benefits are paid by the Federal government to persons whose deceased spouses worked in Social Security covered employment. A widow(er) is eligible to receive benefits if she or he is at least age 60. If a widow(er) remarries before age 60, he or she forfeits the benefit and, therefore, faces a marriage penalty. Under current law, there is no penalty if the remarriage occurs at 60 years of age or later. We investigate whether this rule affects the marriage behavior of widows. Specifically, we examine the rates of remarriage of women around age 60 under current as well as past Social Security eligibility rules using data from the Vital Statistics. Our results provide compelling evidence that this group of women respond to economic incentives when considering the decision to remarry. First, the 1979 law change that eliminated the marriage penalty for those at least age 60 resulted in a large increase in the marriage rate for widows at least age 60, suggesting that the marriage penalty discouraged marriage. The data for the most current period show a significant drop in marriage rates immediately prior to age 60 and an increase after that point. We do not observe this pattern in years when the relative marriage penalty was smaller or for divorced women who generally are not subject to the age-60 remarriage rule.
- Received February 2002.
- Accepted February 2003.
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