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Have People Delayed Claiming Retirement Benefits? Responses to Changes in Social Security Rules: Working Paper 2008-04

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  • Joyce Manchester
  • Jae Song
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Abstract

Two changes have been made recently to rules governing the Social Security program: the retirement earnings test was eliminated in 2000 for people aged 65–69, and the full retirement age (FRA) for people born in 1938 or later was scheduled to gradually increase in two-month increments until reaching age 67. This paper examines changes in the age at which people claim Social Security retirement benefits in response to those changes. Data come from a 1 percent sample of administrative data from the Social Security Administration for 1997 to 2007. Descriptive and regression analyses show that the largest effect of eliminating the earnings test in 2000 occurs at age 65. At that age, the proportion of people who claim retirement benefits increases by 4.6 percentage points among men and 2.4 percentage points among women. In addition, eliminating the earnings test significantly increases—by more than 20 percent—the benefit entitlement hazard for those turning the FRA (that is, the percentage of people who are newly entitled in a given year among those who are fully insured but were not previously entitled). Moreover, the response to the gradual increase in the FRA occurs not only among those who are close to the FRA but also among those who are close to the early retirement age.

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File URL: http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/90xx/doc9077/2008-04.pdf
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Bibliographic Info

Paper provided by Congressional Budget Office in its series Working Papers with number 19575.

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Date of creation: 07 May 2008
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Handle: RePEc:cbo:wpaper:19575

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  1. Mark Duggan & Perry Singleton & Jae Song, 2005. "Aching to Retire? The Rise in the Full Retirement Age and its Impact on the Disability Rolls," NBER Working Papers 11811, National Bureau of Economic Research, Inc.
  2. Leora Friedberg, 2000. "The Labor Supply Effects of the Social Security Earnings Test," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 48-63, February.
  3. Richard Disney & Sarah Smith, 2002. "The Labour Supply Effect of the Abolition of the Earnings Rule for Older Workers in the United Kingdom," CeRP Working Papers 17, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  4. Song, Jae G. & Manchester, Joyce, 2007. "New evidence on earnings and benefit claims following changes in the retirement earnings test in 2000," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 669-700, April.
  5. Baker, Michael & Benjamin, Dwayne, 1999. "How do retirement tests affect the labour supply of older men?," Journal of Public Economics, Elsevier, vol. 71(1), pages 27-51, January.
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