Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/331670 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 18106
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper documents sharp bunching in third-party reported employment earnings at a basic exemption for social security contributions among older workers. Beginning in 2012, workers age 60-64 who were receiving a public pension were required to make social security contributions equal to 9.9 percent of their employment earnings above a basic exemption threshold of $3,500. Using administrative data on third-party reported earnings and a differences-in- bunching estimator we document sharp bunching at the $3,500 threshold. We argue that our results represent new evidence on the role of firms in mediating the earnings response to payroll taxes.
Subjects: 
social security contributions
sharp bunching
employment earnings
JEL: 
H20
H24
H25
H31
H32
H55
J22
J23
J38
Document Type: 
Working Paper

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