Trends in Elective Deferrals of Earnings from 1990–2001 in Social Security Administrative Data

This note examines trends in elective deferrals from 1990 through 2001. Elective deferrals of earnings―401(k)-type plans and similar arrangements for deferring income taxation of earnings placed in retirement accounts―first became common in the early 1980s and have grown in popularity since then. Trends in elective deferrals are potentially important in analyzing historical earnings data and in projecting future Social Security earnings. The deferrals, however, were not explicitly identified in the Social Security Administration’s data on individual earnings until 1990, even though implicit and incomplete information exists since 1984. In this study, accordingly, only the data since 1990 is tabulated.