April 7, 2000 (The Editor’s Desk is updated each business day.)

Labor force participation and Social Security

Congress passed the Social Security earnings test repeal, known as the Senior Citizens Freedom to Work Act, by unanimous vote on April 7, 2000. The law eliminates the earnings test for those who have reached the Social Security normal retirement age, currently age 65.

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Labor force participation trends track closely with Social Security age requirements. For example, data from the Current Population Survey indicate that there is a decline in the percent of individuals participating in the labor force when they reach 62 (when first eligible for Social Security benefits) and again at age 65 (normal retirement age for Social Security benefits).

These data on labor force participation are the products of the Current Population Survey. Read more in "Social Security Earnings Limit Removed" (PDF 18K), by Thomas P. Burke, Compensation and Working Conditions, Summer 2000. The earnings test discussed above reduced Social Security benefits for recipients between the ages of 65 and 69, who had wage income above a certain threshold.