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The effects of subjective survival on retirement and Social Security claiming

Author

Listed:
  • Michael D. Hurd

    (Rand Corporation, Santa Monica, USA)

  • James P. Smith

    (Rand Corporation, Santa Monica, USA)

  • Julie M. Zissimopoulos

    (Rand Corporation, Santa Monica, USA)

Abstract

According to the life-cycle model, mortality risk will influence both retirement and the desire to annuitize wealth. We estimate the effect of subjective survival probabilities on retirement and on the claiming of Social Security benefits because delayed claiming is equivalent to the purchase of additional Social Security annuities. We find that those with very low subjective probabilities of survival retire earlier and claim earlier than those with higher subjective probabilities, but the effects are not large. The great majority of workers claim as soon as they are eligible. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Michael D. Hurd & James P. Smith & Julie M. Zissimopoulos, 2004. "The effects of subjective survival on retirement and Social Security claiming," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 761-775.
    • Handle: RePEc:jae:japmet:v:19:y:2004:i:6:p:761-775
    DOI: 10.1002/jae.752
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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