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Effects of Social Security Policies on Benefit Claiming, Retirement and Saving

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  • Alan L. Gustman
  • Thomas L. Steinmeier

Abstract

An enhanced version of a structural model jointly explains benefit claiming, wealth and retirement, including reversals from states of lesser to greater work. The model includes stochastic returns on assets. Estimated with Health and Retirement Study data, it does a better job of predicting claiming than previous versions. Alternative beliefs about the future of Social Security affect predicted outcomes. Effects of three potential policies are also examined: increasing the early entitlement age, increasing the full retirement age, and eliminating the payroll tax for seniors. Predicted responses to increasing the full entitlement age are sensitive to beliefs.

Suggested Citation

  • Alan L. Gustman & Thomas L. Steinmeier, 2013. "Effects of Social Security Policies on Benefit Claiming, Retirement and Saving," NBER Working Papers 19071, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19071
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:labeco:v:51:y:2018:i:c:p:25-37 is not listed on IDEAS
    2. Raimond Maurer & Olivia S. Mitchell, 2016. "Older People’s Willingness to Delay Social Security Claiming," Working Papers wp346, University of Michigan, Michigan Retirement Research Center.
    3. Alan L. Gustman & Thomas L. Steinmeier, 2014. "The Role of Health in Retirement," NBER Working Papers 19902, National Bureau of Economic Research, Inc.
    4. Aganbegyan, Abel Gezevich & Gorlin, Yury Mikhailovich & Dormidontova, Yulia & Maleva, Tatyana Mikhailovna & Nazarov, Vladimir, "undated". "Analysis of Factors that Influences on Decision About Retirement Age," Published Papers nvg125, Russian Presidential Academy of National Economy and Public Administration.
    5. Bönke, Timm & Kemptner, Daniel & Lüthen, Holger, 2018. "Effectiveness of early retirement disincentives: Individual welfare, distributional and fiscal implications," Labour Economics, Elsevier, vol. 51(C), pages 25-37.
    6. Maurer, Raimond & Mitchell, Olivia S. & Rogalla, Ralph & Schimetschek, Tatjana, 2017. "Optimal social security claiming behavior under lump sum incentives: Theory and evidence," SAFE Working Paper Series 164, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    7. Markus Knell, 2017. "Actuarial Deductions for Early Retirement," Working Papers 215, Oesterreichische Nationalbank (Austrian Central Bank).
    8. Jing You & Miguel Niño-Zarazúa, 2017. "Smoothing or strengthening the ‘Great Gatsby Curve’? The intergenerational impact of China’s New Rural Pension Scheme," WIDER Working Paper Series 199, World Institute for Development Economic Research (UNU-WIDER).
    9. Huang, Wei & Zhang, Chuanchuan, 2016. "The Power of Social Pensions," IZA Discussion Papers 10425, Institute for the Study of Labor (IZA).

    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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