The Effects of Social Security Reforms on Health, Leisure, and Consumption Decisions
Read, Ellen Renee
Doctor of Philosophy
Due to demographic changes and policy changes over the years, the Social Security system is being pushed towards bankruptcy. Reform of the system is necessary. Many papers have studied the effect of Social Security reform on the retirement decision, but they have not concentrated on the impact of reform on leisure and consumption of health related and health neutral goods. I estimate a stochastic dynamic model of demand for consumption, leisure, and health by gmm before and after Social Security reforms drawn from the 1983 amendments and solve the model for the optimal values of those variables. The reforms discourage leisure and encourage a shift towards health consumption.