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Social Security Claiming: Trends and Business Cycle Effects

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  • Owen Haaga
  • Richard W. Johnson

Abstract

This study examines Social Security claiming behavior, which has important implications for older Americans and for the system itself. Retireees may begin collecting benefits as early as age 62, but early claimants receive lower monthly benefits for the rest of their lives. Our data come from Survey of Income and Program Participation (SIPP) files from 1984 to 2009 linked to administrative records on earning and benefits. The sample is restricted to respondents with 40 quarters of covered employment who did not claim benefits before age 62. Results indicate that early claiming has declind over the past decade after increasing over the previous ten years. For men, the share claiming at age 62 fell from 55.3 percent in the 1930 - 34 birth cohort to 46.4 percent in the 1940 - 44 cohort. Over the same period, the share of women claiming at 62 fell from 59.3 to 49.0 percent. The recent trend toward delayed claiming is evident among all educational groups, not just college graduates. Hazard models show that high unemployment boosts Social Security claiming among men with limited education. A 1 percent point increase in the state unemployment rate is associated with a 0.4 percentage point increase in the likelihood each month that men who never attended college will claim benefits, a relative increase of 6 percent, This estimate implies that the Great Recession increased claiming for men with limited education by about 40 percent. Claiming behavior among women and well-educated men is not significantly correlated with the state unemployment rate, however.

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Bibliographic Info

Paper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2012-5.

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Length: 39 pages
Date of creation: Feb 2012
Date of revision: Feb 2012
Handle: RePEc:crr:crrwps:wp2012-5

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  1. Courtney Coile & Peter Diamond & Jonathan Gruber & Alain Jousten, 1999. "Delays in Claiming Social Security Benefits," NBER Working Papers 7318, National Bureau of Economic Research, Inc.
  2. Richard W. Johnson & Amy J. Davidoff & Kevin Perese, 2003. "Health insurance costs and early retirement decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 56(4), pages 716-729, July.
  3. Richard W. Johnson, 2007. "What Happens to Health Benefits after Retirement?," Work Opportunity Briefs, Center for Retirement Research wob_7, Center for Retirement Research, revised Feb 2007.
  4. John L. Czajka & James Mabli & Scott Cody, 2008. "Sample Loss and Survey Bias in Estimates of Social Security Beneficiaries: A Tale of Two Surveys," Mathematica Policy Research Reports, Mathematica Policy Research 6064, Mathematica Policy Research.
  5. Rogowski, Jeannette & Karoly, Lynn, 2000. "Health insurance and retirement behavior: evidence from the health and retirement survey," Journal of Health Economics, Elsevier, Elsevier, vol. 19(4), pages 529-539, July.
  6. Michael Hurd & James P. Smith & Julie M. Zissimopoulos, 2003. "The Effects of Subjective Survival on Retirements and Social Security Claiming," Working Papers, RAND Corporation Publications Department 03-11, RAND Corporation Publications Department.
  7. Leora Friedberg & Michael Owyang & Anthony Webb, 2008. "Identifying Local Differences in Retirement Patterns," Working Papers, Center for Retirement Research at Boston College, Center for Retirement Research wp2008-18, Center for Retirement Research, revised Dec 2008.
  8. Melissa M. Favreault & Austin Nichols, 2011. "Immigrant Diversity and Social Security: Recent Patterns and Future Prospects," Working Papers, Center for Retirement Research at Boston College, Center for Retirement Research wp2011-8, Center for Retirement Research, revised May 2011.
  9. T. Schirle, 2007. "Why Have the Labour Force Participation Rates of Older Men Increased Since the Mid 1990s," Working Papers, Wilfrid Laurier University, Department of Economics eg0045, Wilfrid Laurier University, Department of Economics, revised 2007.
  10. Gordon B.T. Mermin & Richard W. Johnson & Dan Murphy, 2006. "Why Do Boomers Plan to Work So Long?," Working Papers, Center for Retirement Research at Boston College, Center for Retirement Research wp2006-19, Center for Retirement Research, revised Nov 2006.
  11. Gruber, Jonathan & Orszag, Peter, 2003. "Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt?," National Tax Journal, National Tax Association, vol. 56(4), pages 755-73, December.
  12. Gordon B. T. Mermin & Richard W. Johnson & Dan P. Murphy, 2007. "Why Do Boomers Plan to Work Longer?," Journals of Gerontology: Series B, Gerontological Society of America, Gerontological Society of America, vol. 62(5), pages S286-S294.
  13. Hutchens, Robert, 1999. "Social Security Benefits and Employer Behavior: Evaluating Social Security Early Retirement Benefits as a Form of Unemployment Insurance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 659-78, August.
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Cited by:
  1. Hugo Benítez Silva & J. Ignacio García Pérez & Sergi Jiménez Mártin, 2012. "The Effects of Employment Uncertainty and Wealth Shocks on the Labor Supply and Claiming Behavior of Older American Workers," Working Papers 12.11, Universidad Pablo de Olavide, Department of Economics.
  2. Yuriy Gorodnichenko & Jae Song & Dmitriy Stolyarov, 2013. "Macroeconomic Determinants of Retirement Timing," NBER Working Papers 19638, National Bureau of Economic Research, Inc.

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