Can Twenty-Five Million Americans Be Wrong? - A response to Blinder, Gordon, and Wise/Rhetoric and Reality in Social Security Analysis - a Rejoinder

The findings of Blinder, Gordon and Wise (BGW), that Old-Age and Survivors Insurance (OASI) subsidizes wages for most workers aged 62 and over, are criticized as contrary to all previous empirical evidence. The points made by BGW fail to take into account the importance of a life cycle framework for analyzing the impact of OASI, ignore the payroll tax, and misunderstand the method of benefit calculation. BGW reply that the criticism of Burkhauser and Turner (BT) does not dispute the main point of BGW, that social security provides a strong work incentive for married men aged 62-64. They concede that the actuarial adjustment presented in the previous article is overstated in terms of appraising past history, but the calculations are valid for the years since 1977. The life cycle labor supply does not ignore intertemporal substitution.