We study the incidence of Social Security taxes on teacher wages and employment. On average, we estimate teachers with Social Security coverage take home 9.6 percent less in wages than observationally similar teachers in similar districts without Social Security coverage. This accounts for about three-fourths of the 12.4-percent total Social Security tax. Moreover, our analysis suggests this is likely a lower-bound estimate of the true incidence of Social Security taxes – under reasonable assumptions, we cannot rule out full (100%) tax incidence on teacher wages. We find no evidence of tax incidence on teacher staffing levels.

Embedding mandatory investment guarantees in individual retirement accounts (IRAs) can protect workers from equity market shortfalls, but policymakers must understand the economic costs of such guarantees as well as their incidence. Using a life cycle model calibrated for Germany, where investors have access to stocks, bonds, and tax-qualified IRAs, we show that abandoning the guarantee could enhance old-age consumption for over 75% of retirees without harming pre-retirement consumption. Investors averse to equity losses accumulate only moderately more in guaranteed accounts, as these offer only limited protection against market crashes.

In this paper, we study the relative tax advantages of traditional and Roth retirement accounts in the United States by examining the retrospective tax benefits of each account type for the 2003 cohort of retirees. We use the actual history of marginal tax rates at the individual level to estimate that the average tax shields of traditional and Roth retirement accounts‒the excess value of retirement consumption financed by those accounts relative to brokerage accounts‒were 68 percent and 47 percent, respectively. Traditional accounts were better for this cohort largely due to tax cuts in 2001 and 2003. Under a counterfactual with inflation-adjusted 2019 law, the average tax shields for traditional and Roth accounts would have been much closer (33% and 30%, respectively), and nearly half of savers would have achieved higher retirement by saving in Roth accounts rather than in traditional accounts. This is the first paper to apply the history of marginal tax rates‒informed by administrative income records‒to compare Roth and traditional accounts for a particular cohort of retirees.

We investigate the direct effect of the oldest spouse’s statutory retirement age on the retirement behavior of couples. We find a positive direct effect of the statutory retirement age on the labor participation and hours worked of both partners. In particular, we find that younger partners decrease their participation by up to almost 2 percentage points once the oldest spouse reaches the statutory retirement age. Male younger partners are twice as responsive than women. The responsiveness is also about twice as strong in high-income households than in low-income households.

Due to the implementation of several pension reforms, Italian individuals have to take more complex financial decisions and have more responsibilities on their retirement well-being which also includes the choice of whether to participate in pension funds. Relying on novel survey data, we empirically investigate the effect of pension and financial knowledge on the probability of pension plan participation in Italy. Despite documenting the already well-known trends about disparities in the level of such knowledge, we are able to establish that only pension literacy has a positive and causal effect on the probability to participate in a private pension fund.

We use a comprehensive new dataset of asset-class returns in 38 developed countries to examine a popular class of retirement spending rules that prescribe annual withdrawals as a constant percentage of the retirement account balance. A 65-year-old couple willing to bear a 5 percent chance of financial ruin can withdraw just 2.31 percent per year, a rate materially lower than conventional advice (e.g., the 4% rule). Our estimates of failure rates under conventional withdrawal policies have important implications for individuals (e.g., savings rates, retirement timing, and retirement consumption), public policy (e.g., participation rates in means-tested programs), and society (e.g., elderly poverty rates).