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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.

Suggested Citation

  • Owen Haaga & Richard W. Johnson, 2012. "Social Security Claiming: Trends and Business Cycle Effects," Working Papers, Center for Retirement Research at Boston College wp2012-5, Center for Retirement Research, revised Feb 2012.
  • Handle: RePEc:crr:crrwps:wp2012-5
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    References listed on IDEAS

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    Cited by:

    1. Gorodnichenko, Yuriy & Song, Jae & Stolyarov, Dmitriy, 2013. "Macroeconomic Determinants of Retirement Timing," IZA Discussion Papers 7744, Institute for the Study of Labor (IZA).
    2. Hugo Benítez-Silva & J. Ignacio García-Pérez & Sergi Jiménez-Martín, 2011. "The effects of employment uncertainty and wealth shocks on the labor supply and claiming behavior of older American workers," Economics Working Papers 1275, Department of Economics and Business, Universitat Pompeu Fabra.
    3. Joseph F. Quinn & Kevin E. Cahill, 2015. "The New World of Retirement Income Security in America," Boston College Working Papers in Economics 887, Boston College Department of Economics.

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