Framing Effects and Expected Social Security Claiming Behavior
Eligible participants in the U.S. Social Security system may claim benefits anytime from age 62-70, with benefit levels actuarially adjusted based on the claiming age. This paper shows that individual intentions with regard to Social Security claiming ages are sensitive to how the early versus late claiming decision is framed. Using an experimental design, the authors find that the use of a "break-even analysis" has the very strong effect of encouraging individuals to claim early. They also show that individuals are more likely to report they will delay claiming when later claiming is framed as a gain, and when the information provides an anchoring point at older, rather than younger, ages. Moreover, females, individuals with credit card debt, and workers with lower expected benefits are more strongly influenced by framing. They conclude that some individuals may not make fully rational optimizing choices when it comes to choosing a claiming date.
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- Mullainathan, Sendhil & Brown, Jeffrey R. & Kling, Jeffrey R. & Wrobel, Marian Vaillant, 2008.
"Why Don't People Insure Late Life Consumption? A Framing Explanation of the Under-Annuitization Puzzle,"
2799056, Harvard University Department of Economics.
- Jeffrey R. Brown & Jeffrey R. Kling & Sendhil Mullainathan & Marian V. Wrobel, 2008. "Why Don’t People Insure Late-Life Consumption? A Framing Explanation of the Under-Annuitization Puzzle," American Economic Review, American Economic Association, vol. 98(2), pages 304-09, May.
- Jeffrey R. Brown & Jeffrey R. Kling & Sendhil Mullainathan & Marian V. Wrobel, 2008. "Why Don't People Insure Late Life Consumption: A Framing Explanation of the Under-Annuitization Puzzle," NBER Working Papers 13748, National Bureau of Economic Research, Inc.
- H. Benitez-Silva & F. Heiland, 2008.
"Early claiming of social security benefits and labour supply behaviour of older Americans,"
Taylor & Francis Journals, vol. 40(23), pages 2969-2985.
- Hugo Benitez-Silva & Frank Heiland, 2005. "Early Claiming of Social Security Benefits and Labor Supply Behavior of Older Americans," Department of Economics Working Papers 05-05, Stony Brook University, Department of Economics.
- Julie R. Agnew & Lisa R. Anderson & Jeffrey R. Gerlach & Lisa R. Szykman, 2008. "Who Chooses Annuities? An Experimental Investigation of the Role of Gender, Framing, and Defaults," American Economic Review, American Economic Association, vol. 98(2), pages 418-22, May.
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