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Social Security Claiming: Trends and Business Cycle Effects

  • Owen Haaga
  • Richard W. Johnson

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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File URL: http://crr.bc.edu/working-papers/social-security-claiming-trends-and-business-cycle-effects/
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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. 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 764acc7a0a0b462c9906514d5, Mathematica Policy Research.
  2. T. Schirle, 2007. "Why Have the Labour Force Participation Rates of Older Men Increased Since the Mid 1990s," Working Papers eg0045, Wilfrid Laurier University, Department of Economics, revised 2007.
  3. 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.
  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. 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.
  6. Rogowski, Jeannette & Karoly, Lynn, 2000. "Health insurance and retirement behavior: evidence from the health and retirement survey," Journal of Health Economics, Elsevier, vol. 19(4), pages 529-539, July.
  7. 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 wp2006-19, Center for Retirement Research, revised Nov 2006.
  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 wp2011-8, Center for Retirement Research, revised May 2011.
  9. 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, vol. 40(3), pages 659-78, August.
  10. 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.
  11. repec:mpr:mprres:6064 is not listed on IDEAS
  12. COILE, Courtney & DIAMOND, Peter & GRUBER, Jonathan & JOUSTEN, Alain, 2000. "Delays in claiming social security benefits," CORE Discussion Papers 2000029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  13. Leora Friedberg & Michael Owyang & Anthony Webb, 2008. "Identifying Local Differences in Retirement Patterns," Working Papers, Center for Retirement Research at Boston College wp2008-18, Center for Retirement Research, revised Dec 2008.
  14. Richard W. Johnson, 2007. "What Happens to Health Benefits after Retirement?," Work Opportunity Briefs wob_7, Center for Retirement Research, revised Feb 2007.
  15. 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, vol. 62(5), pages S286-S294.
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