%0 Journal Article %J Journal of Pension Economics and Finance %D Forthcoming %T Introduction to special issue on institutional influences on retirement, health and well-being %A Knapp, David %A Lee, Jinkook %K health %K Retirement %K Social Security %K Well Being %X Countries make differing policy choices. They can serve as a scientific laboratory for drawing lessons on the policy paths to follow or to avoid and the consequences of those institutional choices on individuals at older ages. In this special issue we bring together six articles that evaluate the influence of institutions on retirement decisions, health and well-being of older adults using common data that have emerged with the international network of health and retirement studies to study key life outcomes such as health, work, and lifecycle transitions at older ages. %B Journal of Pension Economics and Finance %G eng %R 10.1017/S1474747221000408 %0 Web Page %D 2023 %T Chances Are Your Financial Future Will Be Determined by This Social Security Table %A Williams, Sean %K claiming age %K financial behavior %K Social Security %I The Motley Fool %G eng %U https://www.fool.com/retirement/2023/08/06/financial-future-determined-social-security-table/ %0 Thesis %B Economics %D 2023 %T The Effects of the Social Security Amendments of 1983 on Employment Status, Alcohol Consumption, and Depression %A Adam J. DelGenio %K Alcohol Consumption %K depression %K employment status %K Social Security %B Economics %I City University of New York %C New York %V Master of Arts %P 29 %G eng %U https://academicworks.cuny.edu/cgi/viewcontent.cgi?article=2067&context=hc_sas_etds %0 Web Page %D 2023 %T Here's the Average Social Security Benefit at Age 62 %A Williams, Sean %K claiming age %K Social Security %I The Motley Fool %G eng %U https://www.fool.com/retirement/2023/09/23/heres-the-average-social-security-benefit-age-62/ %0 Journal Article %J International Studies of Economics %D 2023 %T How do subjective mortality beliefs affect the value of social security and the optimal claiming ages? %A Dai, Tiantian %A Sun, Wei %A Webb, Anthony %K Annuity %K Life Expectancy %K Social Security %K subjective mortality beliefs %K variance of age of death %X Households that postpone claiming Social Security benefits are, in effect, making additional purchases of the Social Security annuity and acquiring valuable longevity insurance. This paper investigates the impact of plausible variations of subjective mortality beliefs on the value of delayed claiming and the optimal claiming ages of retired workers. Using the Health and Retirement Study data, we show that older individuals could, on average, predict their life expectancy correctly; however, the average variance of age of death calculated from subjective mortality tables is 6.2%–14.4% lower than that from cohort life tables. Using numerical optimization techniques, we further show that, theoretically, older households place a lower value on delaying claiming when they have greater confidence in their ability to forecast their age of death. But the magnitude of this effect is not large enough to change their optimal claiming ages, unless they hold extreme subjective mortality beliefs. As a result, we conclude that subjective mortality beliefs alone cannot explain the prevalence of early claiming behaviors. © 2023 The Authors. International Studies of Economics published by John Wiley & Sons Australia, Ltd on behalf of Shanghai University of Finance and Economics. %B International Studies of Economics %G eng %R 10.1002/ise3.69 %0 Web Page %D 2023 %T How Social Security Statements Help Retirement Planning %A Markowitz, Andy %K Retirement Planning %K Social Security %I AARP %G eng %U https://www.aarp.org/retirement/social-security/info-2023/statements-and-retirement-planning.html %0 Journal Article %J Journal of Pension Economics and Finance %D 2023 %T Migration, work, and retirement: the case of Mexican-origin populations %A Emma Aguila %A Lee, Zeewan %A Rebeca Wong %K Hispanics %K Immigrants %K Retirement %K Social Security %X Mexico and the United States both face rapid population aging as well as older populations with high poverty rates. Among the most vulnerable populations of retirement age in either nation are Mexican immigrants to the United States. This work uses data from the U.S. Health and Retirement Study and the Mexican Health and Aging Study to assess retirement decisions among persons born in Mexico and working in either nation as well as such decisions by non-Hispanic Whites in the United States. Social security system incentives matter for the retirement of Mexican immigrants in the U.S. but not for return-migrants in Mexico. %B Journal of Pension Economics and Finance %G eng %R 10.1017/S1474747221000342 %0 Report %D 2023 %T Retirement Trajectories and Social Security’s Retirement Earnings Test %A Bob Joondeph %A Nancy J. Altman %A Jagadeesh Gokhale %A Amy Shuart %K benefits %K FRA %K RET %K Social Security %B Research Portfolio on Retirement %I Social Security Advisory Board %C Washington, DC %G eng %U https://www.ssab.gov/research/retirement-trajectories-and-social-security-retirement-earnings-test/?mc_cid=8bc0768a81&mc_eid=4b82b179ac %0 Government Document %D 2023 %T Retirement Trajectories and Social Security’s Retirement Earnings Test %A Social Security Advisory Board %K Earnings %K Retirement %K Social Security %X Social Security’s retirement earnings test (RET) temporarily withholds or reduces the Social Security benefits of people below full retirement age (FRA) who work and earn above a certain threshold while collecting retirement benefits. Those benefits are increased at FRA to account for the months when benefits were withheld or reduced under the RET. The legislative intent of the RET, which has been part of the law since Social Security’s creation in 1935, was to determine whether a worker had left the workforce, since Social Security is designed as an insurance program to partially replace insured workers’ wages that are lost due to old age, disability, or death (for surviving dependents). Studies show that most people do not fully understand how the RET works. While many know that benefits are reduced due to earnings before FRA, most do not understand that this reduction is temporary. %I Social Security Advisory Board %G eng %U https://www.ssab.gov/research/retirement-trajectories-and-social-security-retirement-earnings-test/?mc_cid=8bc0768a81&mc_eid=3249cd8214 %0 Web Page %D 2023 %T Should You Take Social Security at Age 62, 65, or 70? A Comprehensive Analysis Offers a Very Clear Answer %A Williams, Sean %K claiming age %K Retirement %K Social Security %I The Motley Fool %G eng %U https://www.fool.com/retirement/2023/10/07/should-you-take-social-security-at-age-62-65-or-70/ %0 Web Page %D 2023 %T Study Shows Retirees Underestimate Social Security by Nearly $2,000 — How To Resolve This Issue %A Cariaga, Vance %K Retirement %K Social Security %I Yahoo! %G eng %U https://www.yahoo.com/entertainment/study-shows-retirees-underestimate-social-111329408.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAA5lZBA4yel0NU_bHYLyy4BMVJ5pJwu10CEkndY8y8C6Wdmh5BMHN_Q9xwgS_laKOs2f4yyCom5f9nJ3g %0 Report %D 2023 %T Two Decades of Social Security Claiming %A Slavov, Sita %K Social Security %X Twenty years ago, the adjustment to monthly Social Security benefits for early or delayed claiming was, on average, roughly actuarially fair, although some subsets of individuals could gain from delay. Since then, delaying claiming has become much more attractive thanks to three factors: a more generous delayed retirement credit, improvements in mortality, and historically low real interest rates. In this article, I examine how these three factors influence optimal claiming behavior. I also discuss empirical patterns of claiming across individuals and over time, as well as explanations for these patterns. I argue that although many people appear to claim suboptimally early, this behavior may be changing as information spreads about the importance of the claiming decision. Finally, I discuss policy towards claiming and the impact that an increase in strategic claiming could have on Social Security’s finances. %I George Mason University %C Cambridge, MA %G eng %R 10.3386/w30843 %0 Report %D 2023 %T Using Administrative Data to Validate HRS Survey Responses on Application for DI and SSI Disability Benefits %A John Bound %A Charles Brown %A Fang, Chichun %K administrative data %K disability insurance %K Social Security %K Supplemental Security Income %X In this paper, we use administrative data from the Social Security Administration to validate survey responses for the Health and Retirement Study (HRS) regarding the application for disability benefits from Social Security Disability Insurance (DI) or Supplemental Security Income (SSI), focusing on applications that occurred after individuals entered the HRS. In our samples, amongst those that the administrative data identifies as having applied for DI or SSI, over 40% either do not report having applied or inaccurately identify whether or not the application was successful. We find some evidence that the less well educated, those with cognitive limitations, and those experiencing a health limitation on their capacity for work are more likely to misreport applications. We also explore the effect that reporting errors have on parameter estimates in a simple model of the application for DI benefits. Parameter estimates are qualitatively similar regardless of whether we use survey or administrative data to identify the application for DI benefits in our model. %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/using-administrative-data-to-validate-hrs-survey-responses-on-application-for-di-and-ssi-disability-benefits/ %0 Web Page %D 2023 %T You'll Only Have This Much Social Security Left After Paying Medical Bills in Retirement %A Obel, MIke %K medical bills %K Retirement %K Social Security %I Yahoo! %G eng %U https://www.yahoo.com/video/youll-only-much-social-security-140008728.html %0 Journal Article %J Journal of Economics and Finance %D 2022 %T Adjustable consumption model for retirees to balance spending and risk %A Cobb, Barry R %A Murray, Tim %A Smith, Jeffrey S %K consumption %K Monte Carlo simulation %K Retirement %K Social Security %X A retirement consumption strategy that suggests initial consumption and a consumption adjustment factor that adapts spending to returns in the retiree’s investment portfolio while considering appropriate risk tolerance is introduced. This approach allows households to increase their spending earlier in retirement as compared to constant real consumption strategies while still achieving a bequest motive and maintaining investment liquidity. Failure in the model is defined as living only on Social Security payments, and this risk is not significantly increased by employing the adjustable consumption model. Consumption and wealth patterns throughout retirement tend to follow empirical data from the Health and Retirement Study. Results for retirees at varying levels of accumulated wealth, Social Security income level, and risk level are provided. %B Journal of Economics and Finance %V 46 %G eng %N 420–451 %R 10.1007/s12197-022-09572-0 %0 Report %D 2022 %T Health, Disability, and the Evolving Nature of Work %A Butrica, Barbara A. %A Mudrazija, Stipica %K Long-term Care %K O*NET %K Social Security %X This paper explores whether the evolving nature of work has impacted the relationship between health and work-related disability and disability applications through its impact on job demands. Using data from the Health and Retirement Study, supplemented with data on job demands from the Occupational Requirement Survey and Occupational Information Network, we document trends in the association of health and functioning with the risk of experiencing a work-limiting health event and applying for or receiving disability benefits, and assess whether the changing composition of jobs and job demands impacts the strength of this relationship. %B Working Paper %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %G eng %U https://crr.bc.edu/working-papers-social-security/health-disability-and-the-evolving-nature-of-work/ %0 Journal Article %J The Journal of Retirement %D 2022 %T The Illusory Benefit of Working Longer on Retirement Financial Preparedness: Rethinking Advice That Working Longer Increases Retirement Income %A Ghilarducci, Teresa %A Papadopoulos, Michael %A Webb, Anthony %K financial preparedness %K Older workers %K Social Security %K Working Longer %X This article demonstrates that although working longer can, in theory, substantially improve financial preparedness for retirement, it yields much smaller improvements in practice. Multivariate analysis using data from the Health and Retirement Study reveals that working longer improves financial preparedness only for workers who also delay claiming Social Security. But most older workers combine work with Social Security benefits, do not increase their financial wealth, and miss out on the delayed retirement credit. For many, early claiming is a rational choice because their low and often part-time earnings fall short of projected post-retirement income. %B The Journal of Retirement %V 9 %G eng %N 3 %R 10.3905/jor.2022.1.104 %0 Web Page %D 2022 %T Married Women Lost Most of Their Retirement Income Edge: Study %A Bell, Allison %K Marriage %K Retirement income %K Social Security %K women %I ThinkAdvisor %G eng %U https://www.thinkadvisor.com/2022/07/12/married-women-lost-most-of-their-retirement-income-edge-study/ %0 Journal Article %D 2022 %T Retirement Reforms Are Necessary—So Is Strengthening Social Security %A Owen Davis %A Siavash Radpour %A Eva Conway %A Teresa Ghilarducci %K Retirement Reforms %K Social Security %G eng %0 Web Page %D 2021 %T 7 Types of Retirees Who Claim Social Security Early %A Kissell, Chris %K Early retirement %K Social Security %I MoneyTalksNews %G eng %U https://www.moneytalksnews.com/slideshows/types-of-retirees-who-claim-social-security-early/ %0 Report %D 2021 %T The Changing Picture of Who Claims Social Security Early %A Philip Armour %A Knapp, David %K claims %K Retirement %K Social Security %X The authors identify the demographic, employment, and economic characteristics associated with those who claim at the EEA and relate these characteristics to people who claim after it. %B Research Report %I AARP Public Policy Institute %C Washington, D.C. %G eng %R 10.26419/ppi.00133.001 %0 Report %D 2021 %T Child-rearing, Social Security and Married Women’s Labor Supply over the Life Cycle %A Das, Debasmita %K Caregiver Credit %K female labor supply %K life-cycle model %K Social Security %X This paper studies how career interruptions during child-rearing years affect the labor market trajectory, lifetime earnings, and Social Security benefits of married women in the United States. To this end, I develop a dynamic structural life-cycle model of female labor supply, savings, and Social Security benefit claiming and estimate the model using the Method of Simulated Moments for the 1943-1954 cohort. I use the estimated model to quantify the effect of three revenue-neutral counterfactual policy reforms: (i) introducing a Social Security caregiver credit that covers the lost earnings during the first 5 child-rearing years through changes in retirement benefits, (ii) combining the introduction of caregiver credit with the elimination of spousal and survivors benefits, and (iii) removing spousal and survivors benefits. I find that the gender gap in average career earnings at the Social Security Early Retirement Age reduces significantly under all three counterfactual scenarios, with the largest effect of 12.77% decline under the second reform. The findings suggest that instituting caregiver credit for child-rearing in the absence of the marriage-based Social Security benefits would offset a substantial portion of the motherhood penalty in lifetime labor earnings of married women and increase their retirement benefit adequacy. %I Purdue University %G eng %U https://debasmita-das-econ.github.io/resources/JMP_draft_Debasmita_Das_2021.pdf %0 Report %D 2021 %T The Consequences of Claiming Social Security Benefits at Age 62 %A Philip Armour %A Knapp, David %K consequences %K Social Security %X As individuals approach their 60s, they face the important decision about when to start claiming Social Security retirement benefits. “The Consequences of Claiming Social Security Benefits at Age 62” by Philip Armour and David Knapp of the RAND Corporation asks what financial consequences the decision to collect early might have for the individual over time. A companion report, “The Changing Picture of Who Claims Social Security Early,” examines the characteristics of those who decide to start collecting at the early eligibility age (EEA) of 62 compared with those who wait. Importantly, that study suggests that employment losses resulting from the COVID-19 recession may lead to earlier claiming—in particular among those with less education and those living in more rural areas. As the current study shows, this could have significant implications for the financial security of a whole cohort of retirees in the coming decades given the penalties associated with early claiming. %I AARP Public Policy Institute %C Washington, D.C. %G eng %R 10.26419/ppi.00134.001 %0 Web Page %D 2021 %T The Consequences of Claiming Social Security Benefits at Age 62 %A Philip Armour %A Knapp, David %K consequences %K Social Security %X As individuals approach their 60s, they face the important decision about when to start claiming Social Security retirement benefits. “The Consequences of Claiming Social Security Benefits at Age 62” by Philip Armour and David Knapp of the RAND Corporation asks what financial consequences the decision to collect early might have for the individual over time. A companion report, “The Changing Picture of Who Claims Social Security Early,” examines the characteristics of those who decide to start collecting at the early eligibility age (EEA) of 62 compared with those who wait. Importantly, that study suggests that employment losses resulting from the COVID-19 recession may lead to earlier claiming—in particular among those with less education and those living in more rural areas. As the current study shows, this could have significant implications for the financial security of a whole cohort of retirees in the coming decades given the penalties associated with early claiming. %I AARP Public Policy Institute %C Washington, D.C. %G eng %U https://www.aarp.org/ppi/info-2021/-the-consequences-of-claiming-social-security-benefits-at-age-62.html %0 Journal Article %J SSRN %D 2021 %T Guaranteed Income: A License to Spend %A David Blanchett %A Michael S. Finke %K annuities %K Personal finance %K Retirement income %K Social Security %X Prior research finds that retirees don’t spend nearly as much as they could from their investments. Economic theory provides both rational and behavioral explanations for under-spending among retirees with high non-annuitized wealth. Longevity risk will result in lower spending among rational, risk-averse retirees. Retirees may also exhibit behavioral preferences that make them far more comfortable spending from income than assets. We explore how the composition of retirement assets is related to retirement spending and find that retirees who hold a higher percentage of their wealth in guaranteed income spend more than retirees whose wealth consists primarily of non-annuitized assets. Marginal estimates suggest that investment assets generate about half of the amount of additional spending as an equal amount of wealth held in guaranteed income. In other words, retirees will spend twice as much each year in retirement if they shift investment assets into guaranteed income wealth. The size of the effect suggests that the explanation for under-spending non-annuitized savings is likely both a behavioral and a rational response to longevity risk. %B SSRN %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3875802 %0 Report %D 2021 %T How Much Does Social Security Offset the Motherhood Penalty? %A Matthew S. Rutledge %A Alice Zulkarnain %A Sara Ellen King %K Motherhood %K Social Security %X When women become mothers, their labor market income often takes a substantial hit. This “motherhood earnings penalty” becomes even larger with each additional child and permanently reduces earnings throughout mothers’ worklives. Previous studies have linked the penalty to mothers’ reduced educational attainment, more time out of the workforce, higher job search costs, and poor job matches. What remains unanswered is the extent to which the penalty impacts women’s retirement income. This brief, based on a recent study, answers part of this question by looking at how Social Security provisions address the motherhood penalty. The discussion proceeds as follows. The first section explains how Social Security can impact the motherhood earnings penalty and reduce retirement income shortfalls for mothers. The second section lays out the data and methodology for this analysis. The third section finds that Social Security offsets a substantial portion of the earnings penalty. The final section concludes that – despite the equalizing role played by Social Security – a motherhood earnings penalty will remain without policy intervention, such as earnings credits for caregivers. %B Briefs %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %G eng %U https://crr.bc.edu/briefs/how-much-does-social-security-offset-the-motherhood-penalty/ %0 Journal Article %J The Journal of Retirement %D 2021 %T Measuring Racial/Ethnic Retirement Wealth Inequality %A Wenliang Hou %A Geoffrey T. Sanzenbacher %K Retirement %K Social Security %K Wealth management %X As the US population becomes more diverse, it will be increasingly important for policymakers addressing Social Security’s solvency to understand how reliant various racial and ethnic groups will be on the program versus other sources of retirement wealth. Yet, to date, studies on retirement wealth have tended not to focus on race and ethnicity, have largely ignored the role of Social Security, or have excluded the most recent cohort approaching retirement—the Late Boomers. This project uses data from the Health and Retirement Study (HRS) to document the retirement resources of White, Black, and Hispanic households at various points in the wealth distribution for five HRS cohorts of 51- to 56-year-olds between 1992 and 2016.TOPICS: Retirement, wealth management, social securityKey Findings▪ In 2016, the typical Black household had 46 percent of the retirement wealth of the typical White household; the typical Hispanic household had 49 percent. This inequality would be much higher but for the presence of Social Security.▪ The 1992 to 2010 HRS cohorts showed little change in retirement wealth inequality, although a decline in 51- to 56-year-old White households’ retirement wealth between 2010 and 2016 narrowed the racial and ethnic gaps in retirement wealth slightly.▪ The progressivity of Social Security, combined with lower average incomes for minority households, means that replacement rates are more equal than wealth—in 2016, the replacement rate of Black households was 82 percent of White households and Hispanic households was 95 percent. %B The Journal of Retirement %V 8 %P 12–28 %G eng %N 3 %R 10.3905/jor.2020.1.079 %0 Journal Article %J Journal of Pension Economics and Finance %D 2021 %T Older peoples' willingness to delay social security claiming %A Maurer, Raimond %A Olivia S. Mitchell %K Annuity %K Labor Supply %K lump sum %K Retirement Age %K Social Security %X We have designed and implemented an experimental module in the 2014 Health and Retirement Study to measure older persons' willingness to defer claiming of Social Security benefits. Under the current system’ status quo where delaying claiming boosts eventual benefits, we show that 46% of the respondents would delay claiming and work longer. If respondents were instead offered an actuarially fair lump sum payment instead of higher lifelong benefits, about 56% indicate they would delay claiming. Without a work requirement, the average amount needed to induce delayed claiming is only $60,400, while when part-time work is stipulated, the amount is slightly higher, $66,700. This small difference implies a low utility value of leisure foregone, of under 20% of average household income. %B Journal of Pension Economics and Finance %V 20 %P 410 - 425 %G eng %N 3 %9 Journal %R 10.1017/S1474747219000404 %0 Report %D 2021 %T Underfunded Public Sector Pension Plans, Social Security Participation, and the Retirement Decisions of Public Employees %A Papke, Leslie E. %K Pension plans %K Public Sector %K Retirement %K Social Security %X This research compares the retirement choices and economic well-being of public sector employees who are covered by Social Security to those who are uncovered. I use a data set of public employees from 12 waves of the HRS that includes detailed pension wealth, personal early and normal retirement eligibility ages, detailed occupation information, and state of residence. I match these respondents to the funding status of their pension plan and to measures of state revenue capacity to estimate how personal characteristics, pension plan features, and pension plan financial risk affect their choice of retirement age, possible unretirement, and Social Security claiming. Over the period 2009 to 2012, 44 states introduced changes in state pension plans for general employees and teachers to address long-term underfunding—some states more than once. There is limited research to inform us on the relative importance of plan parameters and plan financial risk on the retirement choices and economic well-being of public sector workers—many of whom are not participating in Social Security. This work addresses this shortfall by analyzing how the structure and financial health of these plans affect participant choice of retirement age from the public sector job, subsequent work in the private sector and, if eligible, age of Social Security claiming. %B MRDRC Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/publications/papers/pdf/wp420.pdf %0 Report %D 2021 %T What Explains Low Old-Age Income? Evidence from the Health and Retirement Study %A Olivia S. Mitchell %A Clark, Robert L. %A Annamaria Lusardi %K Income %K retirement savings %K Social Security %X We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %R 10.3386/w28721 %0 Report %D 2020 %T Does Working Longer Enhance Old Age? %A Maria D Fitzpatrick %K health %K Retirement %K Social Security %K Working Longer %X Understanding the link between retirement and health is crucial for both improving people's wellbeing and for designing optimal public policy around retirement. Yet, to date, the economics literature has been inconclusive about whether retirement causes improvements or deterioration in health. The lack of consensus is likely driven by differences in study design, population, and the age of workers and set of health outcomes studied. In this paper, I explain and distill the literature, highlight patterns in the highestquality studies, and discuss the implications of the findings for longevity risk management and worker and retiree health going forward. %B Wharton Pension Research Council Working Papers %I The Wharton School, University of Pennsylvania %C Philadelphia, PA %G eng %U https://repository.upenn.edu/cgi/viewcontent.cgi?article=1691&context=prc_papers %0 Report %D 2020 %T Household responses to disability shocks: Spousal labor supply, caregiving, and disability insurance %A Siha Lee %K Caregiving %K Disability %K Social Security %K spousal labor supply %X This paper examines married women’s time allocation to market hours and spousal care in the event of their husbands’ disability and its implications for evaluating the insurance value of the Social Security Disability Insurance (SSDI) program. First, I find that while spousal labor supply responses to husbands’ disability are small, wives spend a sizable amount of time in spousal care after their husbands become disabled. Motivated by these facts, I develop a dynamic model of married households that incorporates husbands’ disability status, wives’ time allocation choices, health state dependent utility, and the institutional features of SSDI. Counterfactual experiments indicate that caregiving needs substantially attenuate spousal labor supply responses and increase the insurance value of SSDI relative to its costs. Furthermore, policy reforms such as supplementary caregiving benefits can improve social welfare. %B Canadian Labour Economics Forum Working Paper Series %I University of Waterloo %C Waterloo, Ontario %G eng %U https://www.econstor.eu/bitstream/10419/215772/1/169428462X.pdf %9 Report %0 Report %D 2020 %T The Impact of Growing Health and Mortality Inequalities on Lifetime Social Security Payouts %A Péter Hudomiet %A Michael D Hurd %A Susann Rohwedder %K health %K mortality inequalities %K Social Security %X The prevalence of obesity, diabetes, and other health problems has increased in recent decades in the United States, and there is a growing gap between the health and longevity of individuals with high socioeconomic status (SES) and low SES. These trends likely have implications for Social Security’s financial position in the coming decades. Because high-SES individuals tend to receive higher annual benefits and live longer, increases in health and mortality inequalities may result in increases in aggregate Social Security payouts. This paper uses data from the Health and Retirement Study, and a microsimulation model of health, mortality, and Social Security benefits, to forecast lifetime Social Security benefits of the 1934 to 1959 birth cohorts in the U.S. We compare alternative assumptions about the future course of mortality. We find that accounting for health and mortality inequalities is important. In a baseline model that ignores trends in mortality inequalities, we estimate that lifetime Social Security benefits would grow by 26% in real terms between the 1934 and 1959 birth cohorts due to increasing benefit levels and improvements in average mortality. When we account for mortality inequalities, we find an increase of 28% to 38% in average lifetime benefits, depending on the assumptions of the model. We also forecast lifetime benefits using the alternative assumption that improvements in population mortality will slow for younger birth cohorts. %B Michigan Retirement and Disability Research Center Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/publications/papers/pdf/wp412.pdf %0 Journal Article %J The Journal of Human Resources %D 2020 %T Intergenerational Altruism and Retirement Transfers: Evidence from the Social Security Notch %A Mukherjee, Anita %K Altruism %K Caregiving %K Intergenerational transfers %K Social Security %X I contribute new evidence on altruistic preferences in intergenerational transfers using variation in Social Security benefits induced by an inflation-indexing mistake. The instrument is most relevant for those with low education, so I focus on this group. I find support for pure altruism because individuals who received additional Social Security benefits passed on 15.4 percent to children via inter vivos transfers without receiving any additional care in return. On the contrary, children reduce caregiving monotonically with increases in parental Social Security benefits. Adult female children appear to be the most affected as they both receive monetary transfers and reduce caregiving. %B The Journal of Human Resources %G eng %R 10.3368/jhr.58.1.0419-10140R3 %0 Journal Article %J Journal of Pension Economics and Finance %D 2020 %T Pathways to retirement through self-employment %A Ramnath, Shanthi %A John B. Shoven %A Sita Nataraj Slavov %K Retirement %K Self-employment %K Social Security %X We examine the role of self-employment in retirement transitions using a panel of administrative tax data. We find that the hazard of self-employment increases at popular retirement ages associated with Social Security eligibility, particularly for those with greater retirement wealth. Late-career transitions to self-employment are associated with a larger drop in income than similar mid-career transitions. Data from the Health and Retirement Study suggest that hours worked also fall upon switching to self-employment. These results suggest that self-employment at older ages may serve as a ‘bridge job,’ allowing workers to gradually reduce hours and earnings along the pathway to retirement. %B Journal of Pension Economics and Finance %G eng %9 Journal %R 10.1017/S1474747220000062 %0 Journal Article %J Social Security Bulletin %D 2020 %T Perspectives: The Benefit Receipt Patterns and Labor Market Experiences of Older Workers Who Were Denied Social Security Disability Insurance Benefits on the Basis of Work Capacity %A Jody Schimmel Hyde %A April Yanyuan Wu %A Gill, Lakhpreet %K disability insurance %K Social Security %X This article examines the experiences of Social Security Disability Insurance (DI) applicants aged 51 or older who were initially denied benefits because the disability examiner determined that they could perform either their past work or other work. We use Health and Retirement Study survey data linked to administrative data on benefit application and receipt and earnings from the Social Security Administration. We find that few older DI applicants who were denied benefits on this basis resumed work at a substantial level following denial. More commonly, applicants denied at this stage continued to pursue benefits, often successfully. Nearly two-thirds of initial work capacity-related denials were ultimately allowed DI benefits after appealing the initial decision or reapplying, and our estimates suggest that many of the rest claimed Old-Age and Survivors Insurance benefits before they reached full retirement age. %B Social Security Bulletin %V 80 %G eng %U https://www.ssa.gov/policy/docs/ssb/v80n2/v80n2p25.html %N 2 %0 Report %D 2020 %T Replication Data for: Legal Access to Reproductive Control Technology, Women's Education, and Earnings Approaching Retirement %A Jason Lindo %A Mayra Pineda-Torres %A David Pritchard %A Hedieh Tajali %K abortion %K contraception %K Earnings %K Education %K Social Security %X We investigate how historical changes in contraception and abortion access impact women’s long-run outcomes. We use data from the Health and Retirement Study and an identification strategy that leverages variation in exposure to legal changes in access across cohorts born in the same states during the 1960s and 1970s. We follow the methodology of Bailey, Hershbein, and Miller (2012), who used the National Longitudinal Survey of Young Women and documented significant increases in contraception use at ages 18-20 associated with unmarried women’s ability to consent for contraception at such ages. They also documented increased educational attainment and increased earnings in women’s 30s and 40s associated with this confidential access to contraception. Our analysis revisits the effects on education and earnings. We also investigate the sensitivity of the estimated impacts to the legal coding and control variables used in Myers’ (2017) study of the effects on fertility and marriage. The results for educational attainment align with prior work but are not statistically significant. The results for earnings indicate increases in the probability of working in a Social Security (SS) covered job in women’s 20s and 30s associated with early access to contraception and abortion, but we find no evidence of positive effects on women’s earnings in their 50s. %B AEA Papers and Proceedings %I American Economic Association %C Nashville, TN %P 231–35 %G eng %R https://doi.org/10.1257/pandp.20201108 %0 Conference Paper %B 113th Annual Conference on Taxation %D 2020 %T Social Security Eligibility Age and the Health Outcomes and Health Behaviors of the Elderly %A Jun Hyun Yun %K health %K Health Behavior %K Social Security %K Social Security Benefits %K Social Security Eligibility %X I use a regression discontinuity design to investigate the causal relationship between Social Security eligibility age and the health outcomes and health behaviors of elderly individuals. Specifically, I examine changes when individuals attain the Earliest Eligibility Age (EEA) of 62. Given the aging of the U.S. population and the heated debate about whether the EEA should be increased to solve Social Security’s fiscal imbalance problem, understanding such a relationship is important. I use data from the Health and Retirement Study (HRS) to explore this relationship. I find that at the EEA, the probability of receiving Social Security benefits increases by over 30 percentage points. However, there is no evidence that the EEA impacts health. This finding coincides with the idea that health is a stock, the change in which is slow. There is little evidence that the EEA influences mental health. I also show suggestive evidence that when people reach the EEA, they reduce their smoking. I find that males drink more frequently when they reach the EEA. Retirement might be one of the main mechanisms behind the changes in health behaviors. %B 113th Annual Conference on Taxation %I National Tax Association %G eng %U https://nta.confex.com/nta/2020/meetingapp.cgi/Paper/3775 %0 Report %D 2020 %T Social Security Is a Great Equalizer %A Wenliang Hou %A Geoffrey T. Sanzenbacher %K Social Security %X As the U.S. population becomes more diverse, it will be increasingly important for policymakers addressing Social Security’s solvency to understand the extent to which various racial and ethnic groups rely on Social Security versus other sources of retirement wealth. Yet, to date, studies on retirement wealth have tended not to focus on race and ethnicity and have largely ignored the role of Social Security. This brief, based on a recent paper, uses data from the Health and Retirement Study (HRS) to document the retirement resources of white, black, and Hispanic households at various points in the wealth distribution for five cohorts of 51-56 year olds between 1992 and 2016. The discussion proceeds as follows. The first section explains the calculation of retirement wealth. The second section shows how Social Security reduces retirement wealth inequality by race and ethnicity for typical households in each cohort. The third section looks at the impact of Social Security on retirement wealth inequality across wealth quintiles in a single year. The fourth section shifts from wealth to income to examine replacement rates – the ratio of projected retirement income to pre-retirement earnings. The final section concludes that, as policymakers consider changes to bring Social Security into fiscal balance, the distributional impact of any benefit cuts with respect to minority groups may be worth considering. %I Center for Retirement Research %G eng %U https://ideas.repec.org/p/crr/issbrf/ib2020-2.html %0 Report %D 2020 %T Social Security Reform with Heterogeneous Mortality %A John Bailey Jones %A Li, Yue %K Labor Supply %K Mortality %K Social Security %K Welfare %X Using a heterogeneous-agent, life-cycle model of Social Security claiming, labor supply and saving, we consider the implications of lifespan inequality for Social Security reform. Quantitative experiments show that welfare is maximized when baseline benefits are independent of lifetime earnings, the payroll tax cap is kept roughly unchanged, and claiming adjustments are reduced. Eliminating the earnings test and the income taxation of Social Security benefits provides additional gains. The Social Security system that would maximize welfare in a “2050 demographics” scenario, characterized by longer lifespans and an increased education-mortality gradient, is similar to the one that would maximize welfare today. %B Richmond Federal Working Paper Series %I Federal Reserve Bank of Richmond %C Richmond, VA %G eng %U https://www.richmondfed.org/-/media/richmondfedorg/publications/research/working_papers/2020/wp20-09.pdf %0 Journal Article %J Economics Letters %D 2020 %T Is there adverse selection in the U.S. social security system? %A Andrew Beauchamp %A Mathis Wagner %K Adverse selection %K Optimal policy %K Social Security %X Despite facing some of the same challenges as private insurance markets, little is known about the role of adverse selection in Old-Age Social Security. Using data from the Health and Retirement Study, we perform the unused observables version of the positive correlation test, and find robust evidence that people who expect to live shorter lives both choose smaller annuities - by claiming benefits early - and are less costly to insure, implying adverse selection in the system. Results are consistent when using either subjective expectations or observed longevity. Decomposing the sources of adverse selection we find that health, demographics, occupation and financial information together account for much of the positive correlation between mortality and claiming. IV estimates help to rule out moral hazard. %B Economics Letters %P 108995 %G eng %U http://www.sciencedirect.com/science/article/pii/S0165176520300318 %R https://doi.org/10.1016/j.econlet.2020.108995 %0 Journal Article %J Journal of Pension Economics and Finance %D 2020 %T Why are US men retiring later? %A Wenliang Hou %A Alicia H. Munnell %A Geoffrey T. Sanzenbacher %A Yinji Li %K Pension plans %K Retirement Decision %K retirement timing %K Social Security %K structural model %X Over the past two decades, the share of individuals claiming Social Security at the Early Eligibility Age has dropped and the average retirement age has increased. At the same time, Social Security rules have changed substantially, employer-sponsored retirement plans have shifted from defined benefit (DB) to defined contribution (DC), health has improved, and mortality has decreased. In theory, all of these changes could lead to a trend toward later claiming. Disentangling the effect of any one change is difficult because they have been occurring simultaneously. This paper uses the Gustman and Steinmeier structural model of retirement timing to investigate which of these changes matter most by simulating their effects on the original cohort (1931–1941) of the Health and Retirement Study (HRS). The predicted behavior is then compared with the actual retirements of the Early Boomer cohort (1948–1953) to see how much of the later cohort's delayed claiming and retirement can be explained by these changes. The Early Boomer cohort was less likely to be fully retired than the HRS cohort at both age 62 (36.7% vs. 44.0%) and age 64 (49.5% vs. 53.9%). The model suggests that the shift from DB toward DC plans was the biggest contributor to these declines, followed by better health. Social Security rules and improvements in mortality played smaller roles. %B Journal of Pension Economics and Finance %V 19 %P 442–457 %G eng %N 3 %R 10.1017/S1474747218000331 %0 Report %D 2020 %T Why Do Late Boomers Have So Little Retirement Wealth? %A Anqi Chen %A Wenliang Hou %A Alicia H. Munnell %K Retirement wealth %K Social Security %X Over the last 40 years, the retirement system has shifted from defined benefit plans to defined contribution plans, primarily 401(k)s and Individual Retirement Accounts (IRAs). This shift has been accompanied by a decline in Social Security benefits relative to pre-retirement earnings as the program’s Full Retirement Age has moved from 65 to 67. Thus, the expected pattern when examining retirement wealth across cohorts is relatively less wealth from defined benefit plans and Social Security and much more from 401(k)s and IRAs. However, the numbers for the most recent cohort in the Health and Retirement Study – the Late Boomers – show not only the predicted declines in defined benefit plans and Social Security but also an unexpected drop in 401(k)/IRA assets. This drop is alarming given that Late Boomers, who were ages 51-56 in 2016, would have spent the majority of their careers in a defined contribution world. This brief is a first pass at trying to explain why this younger cohort has less in 401(k)/IRA assets than older cohorts had at the same age and what that means for the future of retirement security. The discussion proceeds as follows. The first section identifies the cohorts that are examined and the calculation of retirement wealth. The second section identifies a turn in the fortunes of Late Boomers during the Great Recession, when a significant share stopped working. But lack of employment does not explain the whole problem, so the third section follows working households and finds that after the Great Recession they had lower earnings, less 401(k) participation, and flat 401(k) balances, ending up well below earlier cohorts. A look at more recent cohorts offers a mixed picture for the future. The final section concludes that the Late Boomers’ low 401(k)/IRA wealth can be explained by particularly high levels of unemployment during the Great Recession and more reliance on lower-paid jobs when they re-entered the labor market. Why they were so hard hit, wh %B Center for Retirement Research at Boston College %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/wp-content/uploads/2020/02/IB_20-4.pdf %9 Report %0 Journal Article %J Journal of Pension Economics and Finance %D 2019 %T The Affordable Care Act as retiree health insurance: implications for retirement and Social Security claiming %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Affordable Care Act %K Pensions %K Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper investigates the effects of the Affordable Care Act (ACA) on retirement. The first part of the paper is a difference-in-difference analysis of changes in retirement (and retirement expectations) before and after adoption of the ACA. We find no statistically significant evidence that ACA increased the propensity to retire or changed retirement expectations. The second part of the analysis is based on a structural retirement model. For those age 50 at the time ACA was introduced, the overall reduction in full-time work over the age span 54–65 is simulated to be about 0.1 percentage points. Data are from the Health and Retirement Study. %B Journal of Pension Economics and Finance %V 18 %P 415-449 %G eng %U https://www.cambridge.org/core/journals/journal-of-pension-economics-and-finance/article/affordable-care-act-as-retiree-health-insurance-implications-for-retirement-and-social-security-claiming/24601D49E42B0714381FC2B9F4D55D10 %N 3 %9 Journal %! Journal of Pension Economics and Finance %R 10.1017/S1474747218000033 %0 Journal Article %J Innovation in Aging %D 2019 %T ASSESSING THE ADEQUACY OF SOCIAL SECURITY RETIREMENT BENEFITS ACROSS RACE-ETHNICITY, GENDER, AND AGE OF RETIREMENT %A Jin H. Kim %K gender %K race-ethnicity %K Retirement %K Social Security %K Social Security Benefits %X This research assessed the adequacy of Social Security retirement benefits across race-ethnicity, gender, and age of retirement, and in turn, whether the differing levels of benefit adequacy have any relation to mortality risk. Prior studies generally find that a replacement rate of between 70 to 80 percent of prior earnings would likely allow a worker to maintain his or her standard of living in retirement since various work-related expenses are reduced or eliminated at the point of transition. As such, the current study used panel data from the 1996 - 2016 waves of the Rand version of the Health and Retirement Study to 1) determine earnings replacement rates for non-Hispanic White, non-Hispanic Black, and Hispanic males and females in the first period of retirement, and 2) to examine whether earnings replacement rates are associated with mortality risk in a Cox regression model. The findings revealed that for those retiring at age 65 or later, Hispanic females and White males had the lowest earnings replacement rates at 39.3\% and 40.7\%, respectively. For those retiring before age 65, Hispanic males and White males had the lowest earnings replacement rates at 30.3\% and 26.7\%. Although replacement rates should indeed be lower for high earners due to Social Security’s progressive benefit formula, the low replacement rates determined for Hispanic males and females were unexpected. Moreover, mortality risk was found to be significantly associated with earnings replacement rates in the final model, but the combination of race-ethnicity and gender still showed a stronger relation. %B Innovation in Aging %V 3 %P S890-S890 %G eng %N Suppl 1 %R 10.1093/geroni/igz038.3257 %0 Report %D 2019 %T Bequest Motives and the Social Security Notch %A Siha Lee %A Kegon T. K. Tan %K Assets %K Bequests %K late life savings %K Social Security %X Bequests may be a key driver of late life savings behavior and more broadly, a determinant of intergenerational inequality. However, distinguishing bequest motives from precautionary savings is challenging. Using data from the Health and Retirement Study, we exploit an unanticipated change in Social Security benefits, commonly called the Social Security Notch, as an instrument to identify the effect of benefits on bequests. We show that an increase in benefits leads to a sizable increase in bequest amounts. We combine our instrumental variable estimates with a model of late life savings behavior that accounts for mortality risk and unobserved expenditure shocks to identify bequest motives. The model is used to analyze two counterfactuals. The results demonstrates the importance of bequest motives as a driver of late life savings by comparing asset profiles with and without utility from bequests. We find that roughly one-third of accumulated assets and bequests are attributable to bequest motives among retirees. Our second counterfactual features a more progressive Social Security benefits schedule that reduces benefits for the richest retirees. We show that although wealth declines, consumption remains largely unchanged since wealth generated by bequest motives acts as a cushion against benefit reduction. %I Human Capital and Economic Opportunity Global Working Group %G eng %U https://ideas.repec.org/p/hka/wpaper/2019-061.html %0 Conference Paper %B World Social Security Forum %D 2019 %T The changing nature of work and public pension coverage: Evidence from the US and Europe %A Axel Borsch-Supan %A Courtney Coile %A Jonathan Cribb %A Carl Emmerson %A Yuri Pettinicchi %K International %K Pension Coverage %K Pensions %K Social Security %X We examine nonstandard work and its impact on pension coverage via a case study of the United States, the United Kingdom, and Germany. We define nonstandard work broadly to include alternative work, contingent work, and self-employment. We discuss how nonstandard work may affect public pension coverage, as both the pension rules and the level of actual and reported earnings of workers engaged in nonstandard work can differ from those of workers engaged in standard work. Current nonstandard workers receive essentially symmetric treatment from the pension systems in both the U.S. and U.K., but this is not the case in Germany and is a recent development in the U.K. We find that the share of workers engaged in nonstandard work has changed only modestly over time in these three countries, despite the popular perception that a more significant transformation in the nature of work may be underway. We also find that workers who spent much of their career in self-employment (one type of nonstandard work) have higher levels of financial distress in retirement and rely more on financial assets outside the public pension system. %B World Social Security Forum %I International Social Security Association %C Brussels, Belgium %G eng %U https://ww1.issa.int/sites/default/files/documents/events/2-TCResearch-WSSF2019-report2%20changing%20nature%20of%20work-full-263559.pdf %0 Journal Article %J The Journal of Economic Inequality %D 2019 %T The Course of Income Inequality as a Cohort Ages into Old-Age %A Hungerford, Thomas L. %K Aging %K Capital income %K Earnings %K Income inequality %K Retirement income %K Social Security %X Several researchers have shown that income inequality of a cohort increases as the cohort ages. The various studies examining cohort income inequality use a variety of data, measures, and methods. Is the U.S. experience documented in other studies due (1) to cumulative advantages and disadvantages continuing to work through market income into retirement, (2) to the relative weakness of the U.S. Social Security program, or (3) to potential biases due to data, measures and/or methods? This study examines cohort income inequality using nationally representative longitudinal data and a variety of inequality measures to follow a large sample of individuals from their late pre-retirement years into their retirement years. The findings are: (1) the course of the Gini coefficient is flat as the cohort ages into retirement, (2) but the course of income inequality as this cohort ages into retirement depends on the inequality measure employed, and (3) the trend results suggest that what is going on in the bottom part of the distribution is different from what is going on in the upper part. %B The Journal of Economic Inequality %P 1-20 %8 08/2019 %@ 1573-8701 %G eng %U https://link.springer.com/article/10.1007/s10888-019-09427-5 %! The Journal of Economic Inequality %R https://doi.org/10.1007/s10888-019-09427-5 %0 Journal Article %J National Bureau of Economic Research Working Paper Series %D 2019 %T Do Immigrants Delay Retirement and Social Security Claiming? %A Lopez, Mary J %A Sita Nataraj Slavov %K Immigrants %K Immigration %K Social Security %X As the share of older immigrants residing in the U.S. begins to rise, it is important to understand how immigrants’ retirement behavior and security compare to that of natives. This question has implications for the impact of immigration on government finances and for the retirement security of immigrants. We use data from the Health and Retirement Study (HRS) to examine how immigrants’ retirement and Social Security claiming patterns compare to those of natives. We find that immigrants are significantly less likely than natives to retire or claim Social Security in their early 60s. We do not find heterogeneous effects by ethnicity or age of arrival to the U.S. We also find no evidence that immigrants exit the survey at higher rates than U.S. natives in their late 50s through 60s, a finding that is consistent with immigrants retiring in the U.S. rather than abroad. %B National Bureau of Economic Research Working Paper Series %V No. 25518 %8 2019 %G eng %U http://www.nber.org/papers/w25518 %R 10.3386/w25518 %0 Thesis %B Human Ecology %D 2019 %T Does Gray Divorce Delay Retirement? %A Berkowicz,Sara S. %K 0508:Finance %K 0510:Labor economics %K 0628:Individual & family studies %K Baby Boomers %K Divorce %K Finance %K Gray divorce %K Individual & family studies %K Labor economics %K Retirement %K Social Security %X Baby Boomers are the only demographic cohort whose divorce rate increased from 1990 to 2010. All other age groups experienced lower rates of both marriage and divorce. Divorce tends to reduce wealth at the time it occurs, but longer-term effects differ by gender. Divorcing after or just before retiring may have devastating financial consequences for hundreds of thousands of older adults. Baby Boomers are the largest cohort to face retirement to date. In 2018, 70 million Boomers are age 54 – 72 years old. Yet, most of them have not saved enough to sustain decades- long retirement periods. The short- and long-term economic effects of a massive drop in workforce participation and application for government-paid retirement benefits could be enormous. This study used the 2014 wave of a large, national representative dataset to look at Baby Boomers in their 60s. Multinomial logistic regression was conducted on a unique outcome variable that combined being retired or not with receiving Social Security benefits or not. A focused selection of predictor variables included demographic, marital status, and other lifecycle-related variables. The “Yes/No” gray divorce variable was merged with the variable measuring divorce recency to unify the context of economic shocks at different lifecycle stages. The regression models were run separately by gender. Gray divorce was not a significant predictor for any combination of retiring and receiving Social Security benefits. Later-life marital dissolution did not play a role in respondents’ retirement behavior. A significant effect was found for divorces that had occurred 13 – 24 years earlier, when respondents were in their 40s. The study has implications for future research, policy, and practitioners. %B Human Ecology %I State University of New York at Binghamton %V PhD %P 246 %@ 9781085576499 %G eng %U https://krex.k-state.edu/dspace/handle/2097/39513 %9 phd %0 Journal Article %J Social Science Research %D 2019 %T The growing American health penalty: International trends in the employment of older workers with poor health %A Ben Baumberg Geiger %A René Böheim %A Thomas Leoni %K Disability %K Employment %K health %K Panel data %K Social Security %K Welfare %X Many countries have reduced the generosity of sickness and disability programs while making them more activating – yet few studies have examined how employment rates have subsequently changed. We present estimates of how employment rates of older workers with poor health in 13 high-income countries changed 2004–7 to 2012–15 using HRS/SHARE/ELSA data. We find that those in poor health in the USA have experienced a unique deterioration: they have not only seen a widening gap to the employment rates of those with good health, but their employment rates fell per se. We find only for Sweden (and possibly England) signs that the health employment gap shrank, with rising employment but stable gaps elsewhere. We then examine possible explanations for the development in the USA: we find no evidence it links to labor market trends, but possible links to the USA's lack of disability benefit reform and wider economic trends. %B Social Science Research %V 82 %P 18 - 32 %G eng %U http://www.sciencedirect.com/science/article/pii/S0049089X1830560X %R https://doi.org/10.1016/j.ssresearch.2019.03.008 %0 Journal Article %J The European Journal of Health Economics %D 2019 %T The joint effect of health shocks and eligibility for Social Security on labor supply %A Candon, David %K Employment and Labor Force %K Gender Differences %K Health Conditions and Status %K Health Shocks %K Social Security %X This paper investigates whether or not suffering a health shock, and becoming eligible for social security, have a joint effect on labor supply. Despite millions of people experiencing both of these events each year, no paper has focused exclusively on the joint effect that these events may have on work outcomes. This is surprising given that experiencing a health shock may impact on how a worker responds to becoming eligible for social security. With data from the Health and Retirement Study, I model weekly hours of work as a function of health shocks, social security eligibility, and their interaction. I find that this interaction leads to a 3–4 h reduction in weekly hours of work for men, but has no effect for women. The results are robust to using different work outcomes, age groups, health shock definitions, subgroups, as well as falsification and placebo tests. The results appear to be driven by men who would have had to return to work with impaired health. Policies that promote a more flexible work situation for older men may alleviate these problems in the future. %B The European Journal of Health Economics %P 969–988 %G eng %U https://link.springer.com/article/10.1007%2Fs10198-019-01053-2 %N 20 %9 Journal %! Eur J Health Econ %R 10.1007/s10198-019-01053-2 %0 Web Page %D 2019 %T The life-changing magic of working a bit longer %A Weston, Liz %K Financial security %K News %K Retirement Planning & Satisfaction %K Social Security %B NerdWallet %I NerdWallet %C San Francisco %V 2019 %G eng %U https://www.nerdwallet.com/article/investing/the-life-changing-magic-of-working-a-bit-longer %0 Journal Article %J European Economic Review %D 2019 %T Pension plan heterogeneity and retirement behavior %A Bairoliya, Neha %K Employment and Labor Force %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X This paper examines the role of Social Security policy changes and the shift in pension plans — from annuity based retirement plans like Defined Benefit to account based plans like Defined Contribution — in explaining the recent increase in labor force participation of older workers. A structural retirement model of consumption, savings, Social Security, health insurance and pension plan heterogeneity is estimated using data from the Health and Retirement Study. The model captures key differences in pension wealth evolution across Defined Benefit and Defined Contribution pension plans and accounts for differences in out-of pocket medical spending across different health insurance groups. As a result, it produces variation in labor supply, both across different pension plan groups and health insurance types at older ages, as observed in the data. After controlling for any changes in the population age distribution and health insurance plans over time, model simulations indicate that changes in pension plan composition can explain 30.5 percent of the increase in labor force participation of the age group 65 to 69. Changes in Social Security normal retirement age and earnings test can each explain 19 and 45% of the increase in labor supply respectively for this age group. %B European Economic Review %V 116 %P 28 - 59 %8 Jan-07-2019 %G eng %! European Economic Review %R 10.1016/j.euroecorev.2019.03.005 %0 Report %D 2019 %T The retirement solution hiding in plain sight %A Fellows, Matt %A Fichtner, Jason %A Plews, Lincoln %A Whitman, Kevin %K Decision making %K Retirement %K Social Security %X Social Security now accounts for about one-third of all income annually received by U.S. retirees, amounting to $1 trillion in annual benefits. While impactful, research consistently finds that the financial effect of Social Security could be even greater if more people waited to enroll, since monthly benefits can increase in value if retirees delay claiming. But, we don’t know how much is annually lost from households making the sub-optimal decision about when to claim Social Security, how many are making mistakes, or who is making those wrong decisions. To explore these questions, we utilize new technology invented by United Income and data sponsored by the Social Security Administration, finding: Retirees will collectively lose $3.4 trillion in potential income that they could spend during their retirement because they claimed Social Security at a financially sub-optimal time, or an average of $111,000 per household. The average Social Security recipient would receive 9 percent more income in retirement if they made the financially optimal decision about when to claim this retirement benefit. Current retirees will collectively lose an estimated $2.1 trillion in wealth because they made the sub-optimal decision about when to claim Social Security, or an average of $68,000 per household. Most retirees will lose wealth in their 60s and early 70s if they choose to optimize Social Security, but will be wealthier in their late 70s through the rest of their lives. Only 4 percent of retirees make the financially optimal decision about when to claim Social Security. About 57 percent of retirees would build more wealth through their life if they waited to claim until they were 70 years old (when only 4 percent of retirees currently claim), while only 6.5 percent of retirees would have more wealth if they claimed prior to turning 64 (when over 70 percent of retirees currently claim benefits). About 21 percent of those at risk of not affording retirement (or having enough income to cover their expected cost of living) would see an improvement in their chances if they claimed Social Security at the optimal time. Among those retirees at risk that start with a greater than 10 percent chance of affording retirement, 95 percent see their chances of affording retirement improve by an average of 28 percent. Elderly poverty could be cut by nearly 50 percent if all retirees claimed Social Security at the financially optimal time. In particular, about 13 percent of people over the age of 70 are expected to live in poverty at some point, which is estimated to fall to 7 percent if retirees had claimed Social Security at the optimal time –a rate that could potentially fall even further if they earned additional income while they waited to claim Social Security. This report finds that nearly no retirees are making the financially optimal decision about Social Security, and that the costs of those mistakes are high for retiring households, particularly those at risk of not being able to afford retirement. In addition, since making the optimal decision means sacrificing wealth in the near-term, we think it is unlikely more people will make the right decision without a policy intervention. There are numerous difficulties associated with solving this problem, though, which will require a thorough and diverse process for addressing. Among the topics for consideration should be the eligibility age range rules, which were last materially modified in 1983. Since 92 percent of retirees are expected to be better off waiting to claim until at least their 65th birthday, claiming before should ideally be an exception for those who demonstrably need to claim benefits before the full retirement age. Means-testing rules may be one way to address this, though an easier place to start would be to change how the Social Security Administration frames claiming age options to the public. Instead of portraying age 62 as the “early eligibility age,” for instance, claiming at age 62 could instead be labeled as the “minimum benefit age” while age 70 could be labeled as the “maximum benefit age.” The Social Security Administration could also be provided with resources to improve utilization of the policy it administers, perhaps in partnership with third-party fiduciaries. With the potential to put $2.1 trillion wealth and $3.4 trillion in income in the pockets of retirees, policymakers should be focused on improving this program. %B United Income White Papers %I Capital One %C Washington, D.C. %G eng %U https://unitedincome.capitalone.com/library/the-retirement-solution-hiding-in-plain-sight %0 Report %D 2018 %T Accounting for Social Security Claiming Behavior %A Svetlana Pashchenko %A Ponpoje Porapakkarm %K Annuitization %K Decision making %K Retirement Planning and Satisfaction %K Social Security %X The paper examines why most individuals claim Social Security benefits before the full retirement age. Early claiming results in a substantial reduction in pension income, yet many people claim as early as possible, age 62, or soon thereafter. Since delaying claiming is equivalent to purchasing additional annuity income, this behavior is consistent with the so-called annuity puzzle. We provide a quantitative analysis of claiming decisions (or equivalently, of the demand for the Social Security annuity). Our tool is a structural lifecycle model calibrated to match many important features of the data. %B Center for Retirement Research at Boston College Working Paper Series %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %8 09/2018 %G eng %U http://crr.bc.edu/working-papers/accounting-for-social-security-claiming-behavior-2/ %0 Report %D 2018 %T Do Older SSDI Applicants Denied Benefits on the Basis of their Work Capacity Return to Work After Denial? %A Jody Schimmel Hyde %A April Yanyuan Wu %K Disabilities %K Insurance %K Social Security %K Work %X Key Findings: * Very few older denied SSDI applicants returned to work in the years following denial. * Among those who worked in the years before or after application, average earnings were lower after initial denial relative to before applying for SSDI. * The majority of older SSDI applicants denied on the basis of residual work capacity ultimately receive SSDI before full retirement age (FRA), either after appeal or reapplication. In this issue brief, we document the post-denial employment and benefit experiences of older applicants who are initially denied Social Security Disability Insurance (SSDI) for “work capacity” reasons. Specifically, a disability examiner determined that these applicants had a severe impairment, but denied benefits because the applicants’ residual functional capacity allowed them to perform past work or other work. For simplicity, we use “work capacity” denials for these cases, though that is not SSA’s official nomenclature. We follow the experience of older SSDI applicants from the time they receive an initial denial for SSDI benefits through full retirement age (FRA; age 65 or 66, depending on their birth year). The information in this brief highlights findings from a longer manuscript (Schimmel Hyde et al. 2018). Our findings shed light on the types of policies that might be most beneficial to older workers who experience disability onset to remain working and therefore delay claiming Social Security benefits. %B Mathematica Policy Research Published Reports %I Princeton %C Princeton, NJ %8 09/2018 %G eng %U https://search.proquest.com/docview/2083857692/abstract/40375250D95640A2PQ/1?accountid=14667 %0 Journal Article %J Regional Science and Urban Economics %D 2018 %T The effect of housing wealth shocks on work and retirement decisions %A Jaclene Begley %A Sewin Chan %K Housing wealth %K Retirement %K Retirement reversals %K Social Security %K Unanticipated shocks %X Using panel data from 2000 to 2012, we show that unanticipated zip code-level shocks to home values affect retirement, retirement reversals, and Social Security claims. Among older men, homeowners experiencing moderately negative housing price shocks are less likely to retire, more likely to reverse retirement in some cases, and more likely to delay claiming Social Security relative to those experiencing positive shocks. We find similar responses among specific subgroups of older women, though not in general. Overall, our results imply that adverse housing shocks have substantial influence on labor market participation for older individuals. %B Regional Science and Urban Economics %V 73 %P 180 - 195 %G eng %U http://www.sciencedirect.com/science/article/pii/S0166046217302211 %R https://doi.org/10.1016/j.regsciurbeco.2018.10.001 %0 Thesis %B Economics %D 2018 %T Empirical Evidence on the Labor Market Impacts of U.S. Social Insurance Programs %A John E. Lindner %K 0501:Economics %K 0510:Labor economics %K Economics %K Labor economics %K Social insurance %K Social Sciences %K Social Security %K Unemployment insurance %X Social insurance programs exist in the United States to help workers maintain their standard of living across different states of the world. Examples include unemployment insurance, which aids workers through the state of being unemployed, and Social Security, which supports workers through the state of retirement. The three essays in this dissertation study how these types of social insurance programs alter the decisions workers make in the labor market. The first and third essays focus on unemployment insurance, where the first essay focuses on how different types of workers make decisions in the presence of unemployment insurance and the third essay studies how all workers respond to changes in the provision of unemployment insurance. The second essay examines how Social Security retirement income influences the decision of late-career workers to participate in the labor market. All three essays emphasize that the willingness of workers to pursue a job in the labor market relies upon the social insurance available to them outside of employment. Theoretical models of optimal unemployment insurance predict that the job search and savings behavior of unemployed workers will partially be determined by how long a worker expects to remain unemployed. Empirical evidence suggests, however, that workers often underestimate the duration of their unemployment spell. These biased beliefs about the duration of unemployment among unemployed workers should therefore affect their job search and savings behavior. To date, no reliable data have been used to empirically analyze to what degree biased beliefs would change the behavior of unemployment workers. In the first essay, titled Biased Beliefs and Job Search: Implications for Optimal Unemployment Insurance, I use a novel dataset, the Survey of Unemployed Workers in New Jersey, to evaluate how biased beliefs vary across unemployed workers and how they influence the behavior of those workers. I find that overly-optimistic unemployed workers underestimate the duration of their unemployment, leading them to spend 26 percent less time searching for a job each week than those with a pessimistic bias. I also find that overly-optimistic unemployed workers have over $8,500 less saved at any given point during an unemployment spell. These results suggest that unemployed workers with an optimistic bias would benefit from an information "nudge" that encourages increased search effort and could lead to faster reemployment. The first essay demonstrates how workers respond to the presence of social insurance when they are still focused on rejoining the labor market. That is, it provides evidence on the intensive margin. However, it does not say anything about how it would influence a worker's desire to participate in the labor market at all, on the extensive margin. In the second essay, Do Late-Career Wages Boost Social Security More for Women than Men?, Matthew Rutledge and I estimate the incentives for older workers to continue working during their retirement-age years when they could be collecting Social Security. Any worker who delays claiming Social Security receives a larger monthly benefit because of the actuarial adjustment. Some claimants - particularly women, who are more likely to take time out of the labor force early in their careers - can further increase their benefits if the extra years of work raise their career average earnings by displacing lower-earning years. This essay uses the Health and Retirement Study (HRS) linked to earnings records to quantify the impact of women's late-career earnings on Social Security benefits relative to men's. The essay finds that the average gain in Social Security retirement benefits from working one additional year raises women's monthly benefits by 8.6 percent, of which 1.6 percent is from late-career earnings. These results suggest that, especially among women, there are additional benefits to delaying claiming and further increasing the retirement age. Through both of the first two chapters, the parameters outlining the social insurance program were held constant. In reality, the rules of a social insurance program can change over time. Motivated by this possibility, my third chapter, The Impact of Unemployment Insurance Extensions on Worker Job-Search Behavior, explores how reservation wages and job search effort respond to extensions of unemployment insurance. Current economic theory predicts that reservation wages should rise following an extension of potential benefit duration, while search effort should fall. Previous papers in this literature focus on the end result, which is that UI extensions result in prolonged unemployment spells. Using the Survey of Unemployed Workers in New Jersey, and the UI benefit extension in the United States in November 2009, this paper identifies the worker behaviors that lead to prolonged unemployment durations. Employing hypothesis testing and event study analysis, this study shows there are lagged, significant increases in reservation wages and decreases in search effort following the benefit extension. The results suggest that an alternative model of job search is needed. %B Economics %I Boston College %V PhD %P 123 %@ 9780438281172 %G eng %U https://dlib.bc.edu/islandora/object/bc-ir:108106 %9 phd %0 Report %D 2018 %T Feeling Squeezed? Impact of Social Security Benefit Cuts on Labor Supply and Savings of the Elderly %A Christopher John Cruz %K Labor %K Labor Supply %K Savings %K Social Security %X While there is a general consensus that reforms are needed to improve the financial viability of the Social Security program, these reforms may have welfare implications — both intended and unintended — that remain unexamined. I revisit the 1983 Social Security reforms to examine how a large, potentially unanticipated wealth shock affects elderly workers. I exploit the nonlinearity in the design of the reforms to estimate causal effects on the labor supply and on the savings of older workers at different stages of the lifecycle. The identification highlights the relevance of cohort effects which tend to be assumed away in previous research Evidence suggests that among men, affected cohorts responded by altering their labor supply, but only when they were very close to retirement. Women also contributed through increased labor supply, both at the extensive and intensive margins. In addition, there is evidence that affected workers also responded through higher savings prior to retirement. Nonetheless, the Social Security amendments appear to have disproportionate effects, with some lowereducated workers remaining in the labor force in later years. Enhancing public understanding of the implications of future reforms could mitigate potentially adverse effects particularly on vulnerable subpopulations. %I University of Illinois at Chicago %G eng %U http://www.christopherjohncruz.com/uploads/1/1/2/3/112318225/cruz_jpm2_socsec.pdf %0 Journal Article %J Journal of Pension Economics and Finance %D 2018 %T The financial feasibility of delaying Social Security: evidence from administrative tax data %A Gopi Shah Goda %A Ramnath, Shanthi %A John B. Shoven %A Sita Nataraj Slavov %K Retirement Planning and Satisfaction %K Social Security %K Social Security linkage %X Despite the large and growing returns to deferring Social Security benefits, most individuals claim Social Security before the full retirement age. In this paper, we use a panel of administrative tax data on individuals likely to financially benefit from delaying Social Security claiming to explore the relationship between Social Security claiming and distributions from tax-advantaged retirement savings accounts. We find that the majority of our sample claim Social Security prior to taking distributions from Individual Retirement Accounts (IRAs). We also find that a third of our sample have IRA balances equivalent to at least two additional years of Social Security benefits, and a quarter have IRA balances equivalent to at least 4 years of Social Security benefits. We complement our analysis with data from the Health and Retirement Study and find that these percentages are considerably higher when other financial assets are taken into account. Copyright © Cambridge University Press 2017 This is a work of the U.S. Government and is not subject to copyright protection in the United States. %B Journal of Pension Economics and Finance %V 17 %P 419-436 %8 Jul-04-2018 %G eng %U https://www.cambridge.org/core/product/identifier/S147474721700004X/type/journal_articlehttps://www.cambridge.org/core/services/aop-cambridge-core/content/view/S147474721700004X %N 4 %! Journal of Pension Economics and Finance %R 10.1017/S147474721700004X %0 Web Page %D 2018 %T How Much Do Retirees Really Depend on Social Security? Far Less Than You'd Think. %A Andrew G. Biggs %K News %K Op-ed %K Social Security %B #RetireWell %I Forbes %C New York City %V 2018 %G eng %U https://www.forbes.com/sites/andrewbiggs/2018/03/28/how-much-do-retirees-really-depend-on-social-security-far-less-than-youd-think/#30119e51152c %0 Journal Article %J AEA Papers and Proceedings %D 2018 %T In Debt and Approaching Retirement: Claim Social Security or Work Longer? %A Barbara A Butrica %A Nadia S. Karamcheva %K Debt %K Retirement Planning and Satisfaction %K Social Security %X Over the past couple of decades, older Americans have become considerably more leveraged. This paper considers whether household debt affects the timing of retirement and Social Security benefit claiming. Using data from the Health and Retirement Study, we find that older adults with debt are more likely to work and less likely to receive Social Security benefits than those who are debt-free. Indebted adults are also more likely to delay fully retiring from the labor force and claiming their benefits. Among the sources of debt, mortgages have a stronger impact on older adults' behavior than do other sources of debt. %B AEA Papers and Proceedings %V 108 %P 401-406 %8 05/2018 %G eng %U https://www.aeaweb.org/articles?id=10.1257/pandp.20181116 %M 1699537 %& 401 %0 Journal Article %J Health Economics %D 2018 %T Mental health and retirement savings: Confounding issues with compounding interest %A Bogan, Vicki L. %A Fertig, Angela R. %K depression %K household finance %K Mental Health %K retirement savings %K Social Security %X Summary The questionable ability of the U.S. pension system to provide for the growing elderly population combined with the rising number of people affected by depression and other mental health issues magnifies the need to understand how these household characteristics affect retirement. Mental health problems have a large and significant negative effect on retirement savings. Specifically, psychological distress is associated with decreasing the probability of holding retirement accounts by as much as 24 percentage points and decreasing retirement savings as a share of financial assets by as much as 67 percentage points. The magnitude of these effects underscores the importance of employer management policy and government regulation of these accounts to help ensure households have adequate retirement savings. %B Health Economics %V 27 %P 404-425 %G eng %U https://onlinelibrary.wiley.com/doi/abs/10.1002/hec.3579 %R https://doi.org/10.1002/hec.3579 %0 Report %D 2018 %T The minimum wage and incentives for full-time work under the Social Security retirement earnings test %A Gary V. Engelhardt %K Gender Differences %K Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper examined how the earnings test affects the hours and employment of men who claim early benefits. It uses 1982-2016 data from the Current Population Survey and 1992-2014 data from the Health and Retirement Study. Critical components of the analysis include the idea that for any fixed earnings-test threshold amount, an increase in the hourly wage at which a beneficiary can work reduces the number of hours needed annually to hit the threshold. This feature of the test and substantial state-by-calendar year variation from increases in the minimum wage, which lower the threshold level of hours at which the earnings test binds, are used to identify the impact of the test on labor supply on the intensive and extensive margins for men who claim early. %B Center for Retirement Research at Boston College Working Paper Series %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %P 1-39 %8 10/2018 %G eng %U http://crr.bc.edu/wp-content/uploads/2018/10/wp_2018-13.pdf %0 Report %D 2018 %T Mortality Risk, Insurance, and the Value of Life %A Daniel Bauer %A Julian Reif %K Insurance %K Mortality %K Preventative Care %K Risk Factors %K Social Security %X We develop and apply a generalized framework for valuing health and longevity improvements that departs from conventional assumptions of full annuitization and deterministic mortality. In contrast to conventional theory, we find a given mortality improvement may be worth more, not less, to patients facing shorter lives. Using real-world data, we calculate that severe illness can increase the value of statistical life by over $1 million. This result reconciles an anomaly in the research on preferences for life-extension. Moreover, our framework can value the prevention of mortality and of illness. We calculate that treating illness is up to an order of magnitude more valuable to consumers than prevention, even when both extend life equally. This asymmetry helps explain low observed investment in preventive care. Finally, we show that retirement annuities boost aggregate demand for life-extension. For instance, Social Security adds $11.5 trillion (10.5 percent) to the value of post-1940 longevity gains. %B NBER Working Paper Series %I National Bureau of Economic Research, Inc. %C Cambridge, United States %8 09/2018 %G eng %U https://search.proquest.com/docview/2105077792/9E9B46C457234F7APQ?accountid=14667 %0 Report %D 2018 %T Occupational Retirement and Social Security Reform: the Roles of Physical and Cognitive Health %A Jiayi Wen %K Cognition %K Retirement %K Social Security %X Under skill-biased technical change, jobs are becoming less physically demanding whereas require increasing cognitive abilities. However, existing research does not pay sufficient attention on the role of cognitive health in older people's labor supply, nor to the occupation-dependent labor supply effects of physical and cognitive health. This paper reveals several facts about the heterogeneity of physical and cognitive health, as well as their relationship with older people's labor supply across occupations. Based on these facts, this paper proposes and estimates a dynamic programming structural model of individual retirement and saving decisions. The model allows labor supply effects of physical and cognitive health to differ across occupations via four channels respectively: disutility of working, wage, medical expenditure and life expectancy . I estimate the model with the U.S. Health and Retirement Study data by Indirect Inference. The counterfactual experiments suggest cognitive health has little retirement effect for manual workers. However, for clerical workers, the effect is almost as large as the one of physical health. The counterfactual experiment also reveals the mechanisms through which physical and cognitive health affects labor supply respectively. Finally, this paper quantifies the distributional effects of proposed Social Security changes on retirement, benefits and welfare across occupations. %G eng %U https://ideas.repec.org/p/wyi/wpaper/002390.html %0 Journal Article %J J Gerontol B Psychol Sci Soc Sci %D 2018 %T The Potential Effects of Obesity on Social Security Claiming Behavior and Retirement Benefits. %A Michael D Hurd %A James P Smith %A Julie M Zissimopoulos %K Aged %K Female %K Humans %K Life Expectancy %K Male %K Obesity %K Pensions %K Poverty %K Social Class %K Social Security %K United States %X

OBJECTIVES: Obesity prevalence among Americans has increased for nearly three decades. We explore the relationship between the rise in obesity and Social Security retirement benefit claiming, a decision impacting nearly all aging Americans. Specifically, we investigate whether obesity can affect individuals' decision to claim benefits early, a choice that has important implications for financial security in retirement, particularly for those with lower socioeconomic status (SES).

METHOD: We use a microsimulation model called MINT6 (Modeling Income in the Near Term, version 6) to demonstrate the potential effects of obesity on subjective life expectancy and claiming behavior. We impute obesity status using data from the National Health and Nutrition Examination Survey (NHANES), which describes the distribution of obesity prevalence within the United States by gender, poverty status, and race/ethnicity.

RESULTS: We find that the rise in obesity and the consequent incidence of obesity-related diseases may lead some individuals to make claiming decisions that lead to lower monthly and lifetime Social Security retirement benefits. Further, we find that the potential economic impact of this decision is larger for those with lower SES.

DISCUSSION: We present a behavioral perspective by addressing the potential effects that obesity can have on individuals' retirement decisions and their resulting Social Security retirement benefits.

%B J Gerontol B Psychol Sci Soc Sci %I 19 %V 73 %P 723-732 %8 2018 Apr 16 %G eng %N 4 %L pubs_2004_Hurd_etal_JAE.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/27044665?dopt=Abstract %4 Social Security benefit claiming/Subjective Probabilities of Survival %$ 13622 %R 10.1093/geronb/gbw016 %0 Journal Article %J American Economic Journal: Economic Policy %D 2018 %T The Role of Information in Disability Insurance Application: An Analysis of the Social Security Statement Phase-In %A Philip Armour %K Disabilities %K Long-term Care %K Social Security %K Survey Methodology %X This paper exploits a natural experiment in information provision on US Disability Insurance (DI) applications: the Social Security statement. Although the effect of the statement on DI application was negligible in the general health and retirement study population, among those previously reporting a work limitation, biennial DI application rates approximately doubled. This effect was driven by previously uninformed individuals. Additional analyses show these were new applicants and were no less likely to be accepted onto DI, accounting for a substantial fraction of the rise in DI rolls from 1994 to 2004 and indicating the importance of informational frictions in disability policymaking. %B American Economic Journal: Economic Policy %V 10 %P 1-41 %G eng %U https://pubs.aeaweb.org/doi/10.1257/pol.20160605https://pubs.aeaweb.org/doi/pdf/10.1257/pol.20160605 %N 3 %! American Economic Journal: Economic Policy %R 10.1257/pol.20160605 %0 Report %D 2018 %T What Factors Explain the Decline in Widows' Poverty? %A Alicia H. Munnell %K Education %K Poverty %K Social Security %K Socioeconomic factors %K Widowhood %X One of Social Security’s objectives is to ensure that vulnerable groups have adequate income in retirement. Historically, widows have been of particular concern for policymakers due to their high rates of poverty. However, over the past several decades, their poverty rate has fallen considerably. If it falls farther, widowhood may warrant lower placement on policymakers’ priority list. To understand why this decline has occurred and what this means for the future, this project uses the Health and Retirement Study linked to administrative earnings and benefit records. Specifically, the project focuses on three factors that could explain the decline in widows’ poverty: 1) women’s rising levels of education; 2) their increased attachment to the labor force; and 3) increasing marital “selection” – i.e., the notion that while marriage used to be equally distributed, it is becoming less common among those with lower socioeconomic status. The project explores what share of the decline in poverty can be explained by these factors and also projects the role of these factors in the future. The paper found that: The rise in education and labor force participation explain most of the decline in widows’ average poverty rate from 20 percent in 1994 to 13 percent in 2014.So far, marital selection has not been a driving force in the decline in widows’ poverty.The projections suggest that widows’ poverty will continue to fall over the next 15 years.In the future, up to half of this reduction could be explained by the increasing selection of women into marriage. The policy implications of the findings are: While the projected decline in widows’ poverty may allow policymakers to shift some of their focus to more vulnerable groups, widows will remain poorer than married women.Considering the effect on widows of any change that would bring fiscal balance to the Social Security program will continue to be important. %B Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %P 2-21 %8 05/2018 %G eng %U http://crr.bc.edu/wp-content/uploads/2018/05/wp_2018-4.pdf %0 Journal Article %J The B.E. Journal of Economic Analysis & Policy %D 2018 %T Widowhood and Retirement Timing: Evidence from the Health and Retirement Study %A Schreiber, Philipp %K Life Expectancy %K Retirement Age %K Social Security %K Widowhood %X The combination of an increasing life expectancy, low fertility rates, and an early effective retirement age creates a pressure to act for governments and organizations. The pay-as-you-go social security systems of many countries are troubled by the increasing ratio of retirees to working people. In addition, many organizations face difficulties caused by a shrinking workforce and the accompanied shortage of skilled workers. To counteract, it is essential to create an environment in which older workers are encouraged to stay in the workforce. Therefore, it is important to understand which factors influence the retirement timing decision of workers. This study analyzes how widowhood and changes in demographic, health-related, and financial factors lead to changes in retirement plans of Health and Retirement Study (HRS) respondents. I compare respondents’ actual retirement age with their retirement plans elicited in the HRS wave prior to retirement. The strongest change in retirement timing is caused by widowhood. Respondents who become widowed retire on average 1.7 years earlier than previously planned. The estimated effect of widowhood goes beyond the deterioration of physical health and mental health. My findings suggest that an intervention in an early stage after widowhood by the employer or by health and social care services can help the widowed employee to overcome the temporary adverse effects of widowhood and to prevent a precipitous retirement decision. %B The B.E. Journal of Economic Analysis & Policy %V 18 %8 Sep-06-2019 %G eng %U https://search.proquest.com/docview/2091249748/ED9FE239DE41490BPQ?accountid=14667 %N 3 %R 10.1515/bejeap-2017-0178 %0 Report %D 2018 %T Would Greater Awareness of Social Security Survivor Benefits Affect Claiming Decisions? %A Belbase, Anek %A Quinby, Laura D. %K Bereavement %K Retirement Planning and Satisfaction %K Social Security %X Most Americans enter retirement as married couples, and one spouse, typically the wife, outlives the other. Many widows lack the income needed to maintain the standard of living they had when their husbands were alive. Widows would generally have more adequate incomes if their husbands, who are typically the higher earner in the couple, delayed claiming Social Security. This project uses the Health and Retirement Study (HRS) to test the extent to which husbands consider their wives’ well-being as widows when making claiming decisions. It then uses an online experiment to determine whether raising a husband’s awareness of the risks that his widow faces, and how delayed claiming can reduce those risks, affect his claiming behavior. %B Center for Retirement Research at Boston College Working Paper Series %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %8 10/2018 %G eng %U http://crr.bc.edu/working-papers/would-greater-awareness-of-social-security-survivor-benefits-affect-claiming-decisions/ %0 Web Page %D 2018 %T Yes, it's true: Older people depend on Social Security %A Alicia H. Munnell %K News %K Retirement Planning and Satisfaction %K Social Security %B Marketwatch %I Morningstar %C Chicago, IL %G eng %U http://news.morningstar.com/all/market-watch/TDJNMW20180326311/yes-its-true-older-people-depend-on-social-security.aspx %0 Report %D 2017 %T Adjusting the Payroll Tax to Promote Longer Careers %A John Laitner %A Daniel S. Silverman %K Retirement and Labor Force %K Social Security %K Taxes %X This paper analyzes a prospective Social Security reform that a number of authors have suggested, namely a payroll tax cut targeted on households near retirement. Our approach uses simulations of a life-cycle model, which we estimate from panel data. The simulations study effects on the labor force participation of older households. This paper specifically attempts to improve estimates of the model by incorporating newly available data, using both retirement and wealth accumulation data, and employing a formulation that avoids local optima to isolate only global maxima. Despite the changes, our results are generally consistent with earlier work, though they point to slightly more limited policy benefits. %B Working Papers %I Michigan Retirement Research Center %C Ann Arbor, MI %P 1-47 %G eng %U https://mrdrc.isr.umich.edu/pubs/adjusting-the-payroll-tax-to-promote-longer-careers/ %0 Report %D 2017 %T Annuity Options in Public Pension Plans:The Curious Case of Social Security Leveling %A Robert Clark %A Hammond, Robert %A Morrill, Melinda %A Vanderweide, David %K Annuitization %K Older Adults %K Pensions %K Social Security %X Social Security Leveling is an annuity option that allows participants to receive a level income before and after age 62. The retiree receives a larger pension benefit prior to age 62, but then the pension benefit is lowered at age 62 when the individual is expected to claim Social Security benefits. This option is not uncommon in public pension plans, yet little is known about how this option is used in practice and its impact on well-being in retirement. Our study uses a combination of administrative records and survey data from recent North Carolina public sector retirees. We find that one-third of all retirees selecting a single life annuity between 2009 and 2014 opted for Social Security Leveling. The evidence suggests that individuals are choosing this option in a way that is consistent with their stated preferences and a consumption smoothing motive. However, we also see higher rates of ex post “regret” in the annuity choice among those choosing the level income option. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %8 03/2017 %G eng %U http://www.nber.org/papers/w23262.pdf %R 10.3386/w23262 %0 Journal Article %J Journal of the Economics of Ageing %D 2017 %T Changes in Spending and Labor Supply in Response to a Social Security Benefit Cut: Evidence from Stated Choice Data. %A Delavande, Adeline %A Susann Rohwedder %K Employment and Labor Force %K Financial literacy %K Social Security %X We investigate how individuals in the U.S. expect to adjust their labor force participation and savings if Social Security benefits were cut by 30 percent. Respondents were asked directly what they would do under this scenario. Using the resulting stated choice data we find that respondents would on average reduce spending by 18.2 percent before retirement and 20.4 percent after retirement. About 34.1% of respondents state they would definitely work longer and they would postpone claiming Social Security by 1.1 years. We investigate how working longer and claiming Social Security later would compensate partially for the loss in benefits among the individuals who are currently working, under the assumption that individuals retire and claim at the same time. Individuals would increase their Social Security benefits from the post-reform level due to additional earnings entering the benefit calculation and a smaller early claiming penalty (or higher delayed claiming credit). As a result, the Social Security benefit people would receive would drop on average by 21 rather than 30 percent. Still, the net financial loss, even after accounting for additional earnings, is sizeable for individuals in the lowest wealth tertile. %B Journal of the Economics of Ageing %V 10 %P 34-50 %G eng %1 http://www.ncbi.nlm.nih.gov/pubmed/29075590?dopt=Abstract %R 10.1016/j.jeoa.2017.09.001 %0 Government Document %D 2017 %T The Decline in Earnings Prior to Application for Disability Insurance Benefits %A Costa, Jackson %K Disabilities %K Income %K Medicare/Medicaid/Health Insurance %K Older Adults %K Social Security %7 1 %I Social Security Bulletin %V 77 %P 1-15 %G eng %U https://www.ssa.gov/policy/docs/ssb/v77n1/v77n1p1.html %0 Report %D 2017 %T Drawing down retirement wealth: Interactions between Social Security wealth and private retirement savings %A Philip Armour %A Hung, Angela %K Consumption and Savings %K Retirement Planning and Satisfaction %K Social Security %B Working Paper Series %I RAND Corporation %C Santa Monica, CA %8 01/2017 %G eng %U http://www.rand.org/pubs/working_papers/WR1165.html %R 10.7249/WR1165 %0 Journal Article %J Journal of Pension Economics and Finance %D 2017 %T Early claiming of higher-earning husbands, the survivor benefit, and the incidence of poverty among recent widows %A Diebold, Jeffrey %A Jeremy G. Moulton %A John C. Scott %K Bereavement %K Social Security %K Widowhood %K Women and Minorities %X Social Security provides survivor benefits to lower-earning spouses of deceased workers entitled to a retirement benefit. The value of the survivor benefit depends on a number of factors including the deceased worker's claim age. We use the Health and Retirement Study and a discrete time hazard model to analyze how the claim age of married men influences the likelihood that their spouse will enter poverty in widowhood. We find that delayed claiming is associated with reduction in a widow's poverty risk. The magnitude of this relationship varies significantly with the claim age, Social Security dependence, and survivor benefit dependence. %B Journal of Pension Economics and Finance %V 16 %P 485-508 %G eng %U https://www.cambridge.org/core/product/identifier/S1474747215000438/type/journal_articlehttps://www.cambridge.org/core/services/aop-cambridge-core/content/view/S1474747215000438 %N 4 %! Journal of Pension Economics and Finance %R 10.1017/S1474747215000438 %0 Journal Article %J J Women Aging %D 2017 %T Effects of receipt of Social Security retirement benefits on older women's employment. %A Gillen, Martie %A Claudia J Heath %K Aged %K Employment %K Female %K Humans %K Middle Aged %K Retirement %K Social Security %K United States %K Women's Health %K Women, Working %X

Labor force participation of women has declined since 1999; however, labor force participation of women 62+ has increased. The 2000-2006 waves of Health and Retirement Study (HRS) data, the initial years of the continuing upward trajectory, were used to test the effects of receipt of Social Security retirement benefits on older women's employment. The models tested: (a) the effect of receipt of Social Security retirement benefits on whether employed; and (b) for women receiving Social Security retirement benefits, the effect of age elected receipt of benefits on whether employed. Both models included the effects of human capital characteristics and income sources. Receipt of Social Security benefits, pension income, and current age reduced the likelihood of employment; while educational level, good to excellent health, and nonmarried marital status increased the likelihood of employment. The older the woman was when she elected Social Security benefits, the more likely she was to be employed.

%B J Women Aging %V 29 %P 448-459 %8 2017 %G eng %N 5 %1 http://www.ncbi.nlm.nih.gov/pubmed/27629359?dopt=Abstract %R 10.1080/08952841.2016.1214035 %0 Journal Article %D 2017 %T Guardianship and the Representative Payee Program %A Belbase, Anek %A Geoffrey T. Sanzenbacher %K Guardian %K Pre-existing Conditions %K Social Security %X Research suggests that 0.3 percent of all adults have been appointed a legal guardian. While the requirements for being placed into guardianship can vary from state to state, a lack of decision-making capacity is a precondition. As a result, one would expect Social Security beneficiaries who have a guardian to also have their guardian act as a representative payee. Yet little is known about the relationship between guardianship and the Representative Payee Program. In response to a request from the Social Security Administration, this report uses the Survey of Income and Program Participation (SIPP) linked to the Social Security Master Beneficiary File and the Supplemental Security Record to investigate three questions: 1) how many beneficiaries with representative payees have guardians?; 2) how many beneficiaries have their guardian as their payee?; and 3) what are the characteristics of those with both a payee and a guardian. Because the SIPP does not include individuals residing in nursing homes, the project also examines data from the Health and Retirement Study, which does include these individuals. %P 2-12 %8 08/2017 %G eng %U http://crr.bc.edu/working-papers/guardianship-and-the-representative-payee-program/ %& 2 %0 Journal Article %J Health Affairs %D 2017 %T Health Of Americans Who Must Work Longer To Reach Social Security Retirement Age %A Choi, Hwajung %A Robert F. Schoeni %K Retirement Planning and Satisfaction %K Social Security %K Working Longer %X To receive full Social Security benefits, Americans born after 1937 must claim those benefits at an older age than earlier birth cohorts. Additionally, proposals to improve the fiscal position of Social Security typically include increasing the age at which workers can receive full benefits. Birth cohorts required to work longer are in worse health at ages 49–60, based on multiple measures of morbidity, than cohorts who could retire earlier. %B Health Affairs %V 36 %P 1815 - 1819 %8 Jan-10-2017 %G eng %U http://content.healthaffairs.org/lookup/doi/10.1377/hlthaff.2017.0217https://syndication.highwire.org/content/doi/10.1377/hlthaff.2017.0217 %N 10 %! Health Aff %R 10.1377/hlthaff.2017.0217 %0 Report %D 2017 %T How Much Does Motherhood Cost Women in Social Security Benefits? %A Matthew S. Rutledge %A Alice Zulkarnain %A Sara Ellen King %K Labor force participation %K Motherhood %K Social Security %K Women and Minorities %X The increase in female labor force participation coupled with a higher number of women reaching retirement unmarried has increased the share of women claiming Social Security benefits earned through their own job histories. But they still bear the lion’s share of caregiving responsibilities, and the previous literature has provided clear evidence that motherhood reduces earnings during the childbearing and child-rearing years. What remains understudied is the extent to which mothers face lower lifetime earnings and, consequently, lower Social Security income. This paper uses the Health and Retirement Study (HRS) linked to administrative earnings records to answer three questions. First, how much less do mothers earn over their careers compared to childless women, and how much less do they earn for each additional child? Second, how do Social Security benefits differ between mothers and non-mothers? Third, how does each of the existing elements of the Social Security system that indirectly help mothers – namely, spousal benefits and the progressivity of the benefit formula – contribute to reducing the motherhood penalty? %B Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %P 2-22 %8 10/2017 %G eng %U http://crr.bc.edu/wp-content/uploads/2017/10/wp_2017-14.pdf %0 Report %D 2017 %T How much does Out-of-Pocket Medical Spending Eat Away at Retirement Income? %A Melissa McInerney %A Matthew S. Rutledge %A Sara Ellen King %K Gender Differences %K Income %K Medicare %K Social Security %X The adequacy of retirement income – from Social Security benefits and other sources – is substantially reduced by Medicare’s high out-of-pocket (OOP) costs. This project uses the 2002-2014 Health and Retirement Study to calculate post-OOP benefit ratios, defined as the share of either Social Security benefits or total income available for non-medical spending. The project decomposes the share of income that is going toward premium payments and services delivered and examines how these post-OOP benefit ratios differ by age, gender, income, supplemental insurance coverage, and health status. The project also updates previous studies’ estimates to document how OOP spending and the post-OOP income ratios changed following the introduction of Medicare Part D prescription drug coverage in 2006 and the closing of the “donut hole” coverage gap in 2010, which decreased OOP costs under Part D for those spending moderate amounts on prescriptions. %B Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %P 2-31 %8 10/2017 %G eng %U http://crr.bc.edu/working-papers/how-much-does-out-of-pocket-medical-spending-eat-away-at-retirement-income/ %0 Journal Article %J The Geneva Papers on Risk and Insurance - Issues and Practice %D 2017 %T How the growing gap in life expectancy may affect retirement benefits and reforms %A Auerbach, Alan %A Kerwin K. Charles %A Courtney Coile %A William G. Gale %A Dana P Goldman %A Lee, Ronald %A Lucas, Charles %A Orszag, Peter R. %A Sheiner, Louise %A Tysinger, Bryan %A Weil, David %A Wolfers, Justin %A Rebeca Wong %K Life Expectancy %K Mortality %K Retirement Planning and Satisfaction %K Social Security %B The Geneva Papers on Risk and Insurance - Issues and Practice %V 42 %P 475-499 %8 Jan-07-2017 %G eng %U http://link.springer.com/10.1057/s41288-017-0057-0http://link.springer.com/content/pdf/10.1057/s41288-017-0057-0.pdfhttp://link.springer.com/article/10.1057/s41288-017-0057-0/fulltext.htmlhttp://link.springer.com/content/pdf/10.1057/s41288-017-0057-0.pdf %N 3 %! Geneva Pap Risk Insur Issues Pract %R 10.1057/s41288-017-0057-0 %0 Report %D 2017 %T Incentivizing older people to delay social security claiming %A Maurer, Raimond %A Olivia S. Mitchell %K Retirement Planning and Satisfaction %K Social Security %X Given rising life expectations around the world, it seems that old-age pension benefits will need to be cut and pension contributions boosted in many nations. Yet our research on old-age system reforms does not require raising mandatory retirement ages or contributions. Instead, we offer ways to enhance incentives for people to work longer and delay retirement. There are good reasons to incentivize older people to work longer and delay retirement. These include rising longevity, the shrinking workforce, and emerging evidence indicating that working longer can be associated with better mental and physical health for many people. Nevertheless, old age Social Security systems in many nations find that people tend to claim benefits early, usually leading to reduced benefits.In the United States, for instance, a majority of Americans claim their Social Security benefits at the earlier feasible age, namely 62, even though their monthly benefits would be 75% higher if they waited until age 70. To test whether this is the result of people underweighting the economic value of higher lifetime benefit streams, we examine whether people would claim later and work longer if they were rewarded with a lump sum instead of a higher lifetime benefit stream for deferring. Two arguments have been offered to explain early claiming. One is that workers claim early to avoid potentially “forfeiting” their deferred benefits should they die too soon (Brown et al., 2016). A second explanation is that many people underweight the economic value of lifetime benefit streams (Brown et al., 2017). This latter rationale motivates the present study. %B SAFE Policy Letter Series %I SAFE %C Frankfurt, Germany %G eng %U http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/44313 %0 Journal Article %J Research on Aging %D 2017 %T Marital Biography, Social Security Receipt, and Poverty. %A Lin, I-Fen %A Susan L. Brown %A Anna M Hammersmith %K Gender Differences %K Marriage %K Older Adults %K Poverty %K Social Security %X

Increasingly, older adults are unmarried, which could mean a larger share is at risk of economic disadvantage. Using data from the 2010 Health and Retirement Study, we chart the diverse range of marital biographies, capturing marital sequences and timing, of adults who are age eligible for Social Security and examine three indicators of economic well-being: Social Security receipt, Social Security benefit levels, and poverty status. Partnereds are disproportionately likely to receive Social Security and they enjoy relatively high Social Security benefits and very low poverty levels. Among singles, economic well-being varies by marital biography and gender. Gray divorced and never-married women face considerable economic insecurity. Their Social Security benefits are relatively low, and their poverty rates are quite high (over 25%), indicating Social Security alone is not sufficient to prevent these women from falling into poverty. By comparison, gray widoweds are the most advantaged singles.

%B Research on Aging %V 39 %P 86-110 %8 2017 Jan %G eng %N 1 %R 10.1177/0164027516656139 %0 Report %D 2017 %T Marriage-related Policies in an Estimated Life-cycle Model of Households' Labor Supply and Savings for Two Cohorts %A Borella, Margherita %A Mariacristina De Nardi %A Yang, Fang %K Labor force participation %K Marriage %K Models %K Social Security %X In the United States, both taxes and old age Social Security benefits explicitly depend on one’s marital status. We study the effects of eliminating these marriage-related provisions on the labor supply and savings of two different cohorts. To do so, we estimate a rich life-cycle model of couples and singles using the method of simulated moments (MSM) on the 1945 and 1955 birth-year cohorts. Our model matches well the life-cycle profiles of labor market participation, hours, and savings for married and single people and generates plausible elasticities of labor supply. We find that these marriage-related provisions reduce the participation of married women over their life cycle, the participation of married men after age 55, and the savings of couples. These effects are large for both the 1945 and 1955 cohorts, even though to start with the latter had much higher labor market participation of married women. %B Working Papers %I Michigan Retirement Research Center %C Ann Arbor, MI %P 1-79 %G eng %U http://mrrc.isr.umich.edu/wp371/ %0 Report %D 2017 %T The Mortality Effects of Retirement: Evidence from Social Security Eligibility at Age 62 %A Maria D Fitzpatrick %A Moore, Timothy %K Mortality %K Population Health %K Social Security %X Social Security eligibility begins at age 62, and approximately one third of Americans immediately claim at that age. We examine whether age 62 is associated with a discontinuous change in aggregate mortality, a key measure of population health. Using mortality data that covers the entire U.S. population and includes exact dates of birth and death, we document a robust two percent increase in male mortality immediately after age 62. The change in female mortality is smaller and imprecisely estimated. Additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %G eng %U http://www.nber.org/papers/w24127.pdf %R 10.3386/w24127 %0 Journal Article %J Journal of Economic and Social Measurement %D 2017 %T Reporting accuracy of Social Security benefits and its implications in the Health and Retirement Study %A Irena Dushi %A Howard M Iams %K Medicare/Medicaid/Health Insurance %K Self Report %K Social Security %K Social Security linkage %X This paper examines whether and to what extent the amount of Social Security benefits of older survey respondents in the Health and Retirement Study (HRS) are reported accurately. Inaccurate reporting leads to biased estimates of gross Social Security benefits, affecting estimates of elderly well-being, including the proportion of beneficiaries classified as poor or near poor. Our findings indicate that 73% of HRS respondents report only the net amount of Social Security benefits they receive, excluding Medicare premiums. The implication is that Social Security benefits in the HRS are underestimates of the true gross benefits. Therefore, the HRS data overestimate the proportion of the elderly respondents who are poor or nearly poor. Finally, even after correcting for gross benefits, Social Security income comprises at least 50% of the total family income for about half of elderly respondents. %B Journal of Economic and Social Measurement %V 42 %P 271-292 %G eng %U http://www.medra.org/servlet/aliasResolver?alias=iospress&doi=10.3233/JEM-180449 %N 3-4 %! JEM %R 10.3233/JEM-180449 %0 Report %D 2017 %T Social Security and Total Replacement Rates in Disability and Retirement %A Khan, Mashfiqur R. %A Matthew S. Rutledge %A Geoffrey T. Sanzenbacher %K Consumption and Savings %K Disabilities %K Retirement Planning and Satisfaction %K Social Security %X Social Security provides higher replacement rates to disability insurance beneficiaries than retired beneficiaries. This fact reflects two factors: 1) Disability Insurance (SSDI) beneficiaries have lower career earnings, and Social Security benefits are progressive; and 2) SSDI benefits are not reduced for claiming early. This project uses the 1992-2010 waves of the Health and Retirement Study (HRS) linked to Social Security Administration earnings records to decompose the differences between the Social Security replacement rates for retired worker and SSDI beneficiaries into these two factors. The project also examines how the total replacement rate – which accounts for other sources of income in addition to Social Security – differs between retirees and SSDI beneficiaries to capture the difference in overall retirement security between the two groups. The results indicate that about half of the 10-percentage-point advantage in Social Security replacement rates for SSDI beneficiaries is due to the actuarial adjustment applied to retirement benefits, implying that career earnings are not that different between retired workers and SSDI beneficiaries. But total replacement rates are substantially lower for SSDI beneficiaries, which indicates that, despite Social Security’s vital role in providing a reliable income source, SSDI beneficiaries have much lower post-career well-being than retired workers. %B Working Papers %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %8 05/2017 %G eng %U http://crr.bc.edu/working-papers/social-security-and-total-replacement-rates-in-disability-and-retirement/ %0 Report %D 2017 %T Social Security Claiming and the Annuity Puzzle %A Shepard, Mark %K Social Security %X Life cycle theory predicts that individuals facing uncertain mortality will annuitize all or most of their retirement wealth. Researchers seeking to explain why retirees rarely purchase annuities have focused on imperfections in commercial annuities – including actuarially unfair pricing, lack of bequest protection, and illiquidity in the case of risky events like medical shocks. I study the annuity choice implicit in the timing of Social Security claiming and show that none of these can explain why most retirees claim benefits as early as possible, effectively choosing the minimum annuity. Most early claimers in the Health and Retirement Study had sufficient liquidity to delay Social Security longer than they actually did and could have increased lifetime consumption by delaying. Because the marginal annuity obtained through delay is better than actuarially fair, standard bequest motives cannot explain the puzzle. Nor can the risk of out-of-pocket nursing home costs, since these are concentrated at older ages past the break-even point for delayed claiming. Social Security claiming patterns, therefore, add to the evidence that behavioral explanations may be needed to explain the annuity puzzle. %I Harvard University %G eng %U https://scholar.harvard.edu/mshepard/publications/social-security-claiming-and-life-cycle-model %0 Web Page %D 2017 %T Social Security giveth, medical costs taketh away %A Andrews, Michelle %K Medical Expenses %K News %K Social Security %B Chicago Tribune %I Kaiser Health News %C Menlo Park, CA %G eng %U https://khn.org/news/social-security-giveth-medical-costs-taketh-away/ %0 Journal Article %J International Journal of Manpower %D 2017 %T To claim or to retire: The social security claiming decision of employed and unemployed workers %A Fawaz, Yarine %K Employment and Labor Force %K Social Security %X Purpose The purpose of this paper is to use the Health and Retirement Study to examine the social security (SS) claiming decision of older Americans, with a focus on the behavior of the unemployed. Design/methodology/approach Using a duration model first, and a bivariate probit framework then, the author investigates whether older unemployed individuals lacking liquidity use SS benefits as a safety net in order to finance consumption during an unemployment episode, even if they do not retire at the same time. In this way, SS might be thought as a form of unemployment insurance (UI) which would allow them to maintain their standard of living during their job search. Findings The author finds evidence of a claiming pattern specific to the unemployed: they claim sooner than full-time workers, even when they do not retire at the same time. They also seem to discontinue this behavior when their access to UI is extended, which gives support to the author’s hypothesis that the unemployed workers, who lack liquidity, claim their SS benefits even if they do not wish to retire, as a source of alternative unemployment benefits. Originality/value By focusing on the SS claiming behavior of the unemployed rather than on their retirement patterns, this paper sheds light on the social insurance role of SS retirement benefits for unemployed workers who are not willing to retire, but need a new source of income while they continue looking for a job. %B International Journal of Manpower %V 38 %P 392-416 %8 May-06-2017 %G eng %U http://www.emeraldinsight.com/doi/10.1108/IJM-08-2015-0127 %N 3 %! Int J of Manpower %R 10.1108/IJM-08-2015-0127 %0 Report %D 2017 %T Why Are U.S. Households Claiming Social Security Later? %A Wenliang Hou %A Alicia H. Munnell %A Yinji Li %A Geoffrey T. Sanzenbacher %K Social Security %K Social Security Benefits %X Over the past two decades, the share of individuals claiming Social Security at the Early Eligibility Age has dropped, and the average retirement age has increased. At the same time, Social Security rules have changed substantially, employer-sponsored retirement plans have shifted from defined benefit (DB) to defined contribution (DC), health has improved, and mortality has decreased. In theory, all of these changes could lead to a trend toward later claiming. Disentangling the effect of any one change is difficult because they have been occurring simultaneously. This paper uses the Gustman and Steinmeier structural model of retirement timing to investigate which of these changes matter most by simulating their effects on the original cohort (1931-1941 birth years) of the Health and Retirement Study (HRS). The predicted behavior is then compared to the actual retirements of the Early Baby Boomer cohort (1948-1953 birth years) to see how much of the later cohort’s delayed claiming and retirement can be explained by these changes. %I Center for Retirement Research at Boston College %G eng %U https://crr.bc.edu/working-papers/why-are-u-s-households-claiming-social-security-later/ %0 Report %D 2016 %T The Affordable Care Act as Retiree Health Insurance: Implications for Retirement and Social Security Claiming %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Affordable Care Act %K Health Insurance %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %X Using data from the Health and Retirement Study, we examine the effects of the Affordable Care Act (ACA) on retirement. We first calculate retirements (and in related analyses changes in expected ages of retirement and/or Social Security claiming) between 2010, before ACA, and 2014, after ACA, for those with health insurance at work but not in retirement. This group experienced the sharpest change in retirement incentives from ACA. We then compare retirement measures for those with health insurance at work but not in retirement with retirement measures for two other groups, those who, before ACA, had employer provided health insurance both at work and in retirement, and those who had no health insurance either at work or in retirement. To complete a difference-in-difference analysis, we make the same calculations for members of an older cohort over the same age span. We find no evidence that ACA increases the propensity to retire or changes the retirement expectations of those who, before ACA, had coverage when working but not when retired. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %P 1-55 %8 11/2016 %G eng %U http://www.nber.org/papers/w22815.pdf %R 10.3386/w22815 %0 Report %D 2016 %T Cognitive Impairment and Social Security’s Representative Payee Program %A Geoffrey T. Sanzenbacher %A Belbase, Anek %K Cognition %K Cognitive Ability %K Social Security %X Social Security’s Representative Payee Program allows one individual to receive benefits on behalf of a retiree or disabled person who is incapable of managing them. In the case of retirees with cognitive impairment, the program could help prevent fraud by ensuring that Social Security benefits are immediately turned over to a capable individual. This paper seeks to answer three questions about the Representative Payee Program and its relationship to cognitive impairment. First, what share of individuals with cognitive impairment use a representative payee? Second, if individuals with cognitive impairment are not using a payee, what are they doing instead? Finally, is it possible to identify recipients with cognitive impairment who have no help managing their finances (through a representative payee or otherwise), a situation that makes them especially vulnerable to fraud? %I Center for Retirement Research at Boston College %G eng %U https://crr.bc.edu/working-papers/cognitive-impairment-and-social-securitys-representative-payee-program/ %0 Report %D 2016 %T Distributional Effects of Means Testing Social Security: An Exploratory Analysis %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Net Worth and Assets %K Public Policy %K Social Security %X This paper examines the distributional implications of introducing additional means testing of Social Security benefits where proceeds are used to help balance Social Security's finances. Benefits of the top quarter of households ranked according to the relevant measure of means are reduced using a modified version of the Social Security Windfall Elimination Provision (WEP). The replacement rate in the first bracket of the benefit formula, determining the Primary Insurance Amount (PIA), would be reduced from 90 percent to 40 percent of Average Indexed Monthly Earnings (AIME). Four measures of means are considered: total wealth; an annualized measure of AIME; the wealth value of pensions; and a measure of average indexed lifetime W2 earnings. The empirical analysis is based on data from the Health and Retirement Study. These means tests would reduce total lifetime household benefits by 7 to 9 percentage points. We find that the basis for means testing Social Security makes a substantial difference as to which households have their benefits reduced, and that different means tests may have different effects on the benefits of families in similar circumstance. We also find that the measure of means used to evaluate the effects of a means test makes a considerable difference as to how one would view the effects of the means test on the distribution of benefits. %B NBER Working Paper Series %I Cambridge, MA, National Bureau of Economic Research %P 1-28 %G eng %4 social Security/Public Policy/means testing/wealth/pension wealth %$ 999999 %0 Report %D 2016 %T The Effect of Social Security Information on the Labor Supply and Savings of Older Americans %A Philip Armour %A Lovenheim, Michael F. %K Labor Supply %K Social Security %X This paper examines how older workers adjust their labor supply in response to information they receive about their retirement wealth from the provision of the Social Security Statement. We find that older male workers’ labor supply is highly responsive to receiving personalized information about future Social Security benefits, leading to a reduction of 119 hours worked per year, on average. However, our estimates point to significant heterogeneity in this response, with workers at the lower end of the hours-worked distribution increasing their labor supply and those at the high end decreasing their labor supply. We argue differences in knowledge about Social Security benefits across the labor supply distribution can explain much of this heterogeneity. We additionally explore the extent to which the information on the Statement may have led some workers to mistakenly reduce their labor supply by too much due to a lack of understanding of the dynamic nature of the Statement’s benefit projections with respect to earnings. Receipt of a second Statement led all but the lowest hour workers to increase their labor supply relative to workers who did not receive a second Statement. This is consistent with workers misunderstanding the information provided as accumulated rather than projected wealth. Our results point to older workers being very responsive to Social Security information, which highlights the need to accurately convey information about both pension wealth and its sensitivity to changes in earnings. %I Michigan Retirement Research Center- University of Michigan %C Ann Arbor, United States %8 09/2016 %G eng %U https://pdfs.semanticscholar.org/9948/f3430170f13c34b24b71eca001723c55f03a.pdf %0 Journal Article %J Review of Financial Studies %D 2016 %T How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios %A Hubener, Andreas %A Maurer, Raimond %A Olivia S. Mitchell %K Gender Differences %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %X We show how optimal household decisions regarding work, retirement, saving, portfolio allocations, and life insurance are shaped by the complex financial options embedded in U.S. Social Security rules and uncertain family transitions. Our life cycle model predicts sharp consumption drops on retirement, an age-62 peak in claiming rates, and earlier claiming by wives versus husbands and single women. Moreover, life insurance is mainly purchased on men's lives. Our model, which takes Social Security rules seriously, generates wealth and retirement outcomes that are more consistent with the data, in contrast to earlier and less realistic models %B Review of Financial Studies %V 29 %P 937 - 978 %8 Jul-04-2016 %G eng %U http://rfs.oxfordjournals.org/lookup/doi/10.1093/rfs/hhv070 %N 4 %! Rev. Financ. Stud. %R 10.1093/rfs/hhv070 %0 Report %D 2016 %T Late-in-Life Risks and the Under-Insurance Puzzle %A Ameriks, John %A Briggs, Joseph S. %A Caplin, Andrew %A Matthew D. Shapiro %A Tonetti, Christopher %K Affordable Care Act %K Health Insurance %K Health Shocks %K Medicare/Medicaid/Health Insurance %K Older Adults %K Risk Factors %K Social Security %X Individuals face significant late-in-life risks, including needing long-term care (LTC). Yet, they hold little long-term care insurance (LTCI). Using both "strategic survey questions," which identify preferences, and stated demand questions, this paper investigates the degree to which a fundamental lack of interest and poor product features determine low LTCI holdings. It estimates a rich set of individual-level preferences and uses a life-cycle model to predict insurance demand, finding that better insurance would be far more widely held than are products in the market. Comparing stated and model-predicted demand shows that flaws in existing products provide a significant, but partial, explanation for this under-insurance puzzle. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %P 1-62 %8 10/2016 %G eng %U http://www.nber.org/papers/w22726.pdf %R 10.3386/w22726 %0 Report %D 2016 %T Leaving Big Money on the Table: Arbitrage Opportunities in Delaying Social Security %A Bronshtein, Gila %A Jason S Scott %A John B. Shoven %A Sita Nataraj Slavov %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %X Recent research has documented that delaying the commencement of Social Security benefits increases the expected present value of retirement income for most people. Despite this research, the vast majority of individuals claim Social Security at or before full retirement age. Claiming Social Security early is not necessarily a mistake, as delaying Social Security commencement requires forgoing current income in exchange for future income. The decision to claim early could therefore rationally be driven by liquidity constraints, mortality concerns, bequest motives, a high time discount rate, or a variety of other preference related factors. However, for some individuals, delaying Social Security offers a significant arbitrage opportunity because they can defer Social Security and have higher income in all future years. Arbitrage exists for most primary earners who either purchase a retail-priced annuity or opt for a defined benefit annuity when a lump sum payout is offered, while forgoing the opportunity to defer Social Security. These individuals are essentially buying an expensive annuity when a cheaper one is available, and their decision to claim Social Security early is almost certainly a mistake. The magnitude of the mistake can reach up to approximately $250,000. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %P 1-34 %8 11/2016 %G eng %U http://www.nber.org/papers/w22853.pdf %R 10.3386/w22853 %0 Web Page %D 2016 %T Living longer, working longer %A Michael D Hurd %A Susann Rohwedder %K Employment and Labor Force %K Social Security %B Commentary (The RAND Blog) %I The RAND Corporation %C Santa Monica, CA %G eng %U https://www.rand.org/blog/2016/08/living-longer-working-longer.html %0 Report %D 2016 %T Older Peoples’ Willingness to Delay Social Security Claiming %A Maurer, Raimond %A Olivia S. Mitchell %K Employment and Labor Force %K Health Shocks %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %X We have designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons' willingness to voluntarily defer claiming of Social Security benefits. In addition, we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46%, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or under 20% of average household income. %B NBER Working Paper Series %I National Bureau of Economic Research %C Cambridge, MA %P 1-27 %8 12/2016 %G eng %U http://www.nber.org/papers/w22942.pdf %R 10.3386/w22942 %0 Journal Article %J Business Economics %D 2016 %T Public and Private Challenges of an Aging U.S. Population %A Olivia S. Mitchell %K Income %K Income inequality %K Savings %K Social Security %K Spending %K Taxes %X The challenges posed by the aging of the US population for business and public policy are vast. They are amplified particularly by: * Slow increase of incomes - and therefore low private savings - for those at the bottom of the pay distribution. * Cutbacks in employee health-care insurance and defined benefit pension plans. * Unsustainability of Social Security and Medicare as currently configured. This paper spells out these challenges and discusses how they can be addressed. Of particular importance are some combination of enhanced revenue and reduced expenditure for Social Security and Medicare, the shift of private pension plans from defined benefit to defined contribution, the need to consider later retirement ages, and the need for improved personal financial literacy. %B Business Economics %V 51 %P 8 - 10 %8 Jan-01-2016 %G eng %U http://dx.doi.org/10.1057/be.2016.6 %N 1 %! Bus Econ %R 10.1057/be.2016.6 %0 Report %D 2016 %T Social Security and Retirement Programs Around the World: The Capacity to Work at Older Ages - Introduction and Summary %A Courtney Coile %A Kevin Milligan %A David A Wise %K Disabilities %K Employment and Labor Force %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This is the introduction and summary to the seventh phase of an ongoing project on Social Security Programs and Retirement Around the World. The project compares the experiences of a dozen developed countries and uses differences in their retirement program provisions to explore the effect of SS on retirement and related questions. The first three phases of this project document that: 1) incentives for retirement from SS are strongly correlated with labor force participation rates across countries; 2) within countries, workers with stronger incentives to delay retirement are more likely to do so; and 3) changes to SS could have substantial effects on labor force participation and government finances. The fourth volume explores whether higher employment among older persons might increase youth unemployment and finds no link between the two. The fifth and sixth volumes focus on the disability insurance (DI) program, finding that changes in DI participation are more closely linked to DI reforms than to changes in health and that reducing access to DI would raise labor supply. This seventh phase of the project explores whether older people are healthy enough to work longer. We use two main methods to estimate the health capacity to work, asking how much older individuals today could work if they worked as much as those with the same mortality rate in the past or as younger individuals in similar health. Both methods suggest there is significant additional health capacity to work at older ages. %I Cambridge, MA: National Bureau of Economic Research %G eng %U https://www.nber.org/papers/w21939 %4 Social Security/labor Force Participation/retirement planning/Public Policy/disability insurance %$ 999999 %0 Report %D 2016 %T Why Researchers Now Rely on Surveys for Race Data on OASDI and SSI Programs: A Comparison of Four Major Surveys %A Martin, Patricia P. %A Office of Retirement and Disability Policy %K Demographics %K Health Insurance %K Methodology %K Social Security %X In the absence of reliable administrative data for race categories, SSA researchers now primarily use data from four major surveys (1) the Current Population Survey (CPS); (2) the Survey of Income and Program Participation (SIPP); (3) the American Community Survey (ACS); and (4) the Health and Retirement Study (HRS) to examine OASDI and SSI program use by race and ethnicity. The race data collected in these surveys are self-reported, and although there are inherent technical issues with that process, those data are the primary source of national race data available (R os, Romero, and Ram rez 2014). However, each data set possesses a unique set of advantages and limitations for analyzing the OASDI and SSI programs. This note provides a historical background on SSA's race and ethnicity data collection. It compares the four alternative data sources most commonly used to estimate OASDI and SSI program statistics by beneficiary race and ethnicity. This overview is designed to help individuals better understand the race and ethnicity data available in existing SSA publications. It may be of use to researchers considering future OASDI and SSI analyses as well. %I Washington, DC, Social Security Administration %G eng %U https://www.ssa.gov/policy/docs/rsnotes/rsn2016-01.html %4 Social Security Administration/earnings and benefits files/administrative data/beneficiaries/sociodemographic factors/sociodemographic factors/race and ethnicity %$ 999999 %0 Journal Article %J Journal of Political Economy %D 2015 %T Adverse Selection in the Annuity Market and the Role for Social Security %A Hosseini, Roozbeh %K Net Worth and Assets %K Pensions %K Social Security %X I study the role of social security in providing insurance when there is adverse selection in the annuity market. I calculate welfare gain from mandatory annuitization in the social security system relative to a laissez-faire benchmark, using a model in which individuals have private information about their mortality. I estimate large heterogeneity in mortality using the Health and Retirement Study. Despite that, I find small welfare gain from mandatory annuitization. Social security has a large effect on annuity prices because it crowds out demand by high-mortality individuals. Welfare gain would have been significantly larger in the absence of this effect. %B Journal of Political Economy %I 123 %V 123 %P 941-984 %G eng %N 4 %4 Social Security/annuities/mandatory annuitization %$ 999999 %R 10.1086/681593 %0 Report %D 2015 %T Are cancer survivors who are eligible for social security more likely to retire than healthy workers? Evidence from difference-in-differences %A Candon, David %K Employment and Labor Force %K Health Conditions and Status %K Retirement Planning and Satisfaction %K Social Security %X Despite the fact that there are over a million new cancer cases detected in the U.S. every year, none of retirement-health literature focuses specifically on the effect that cancer has on retirement. Social Security may offer a pathway to retirement for eligible workers but the separate effects of both cancer, and Social Security, on retirement, need to be accounted for. I use the fact that some workers will be eligible for Social Security when they are diagnosed with cancer, while some will not, as a source of exogenous variation to identify the joint effect of cancer diagnosis and Social Security eligibility on retirement. With data from the Health and Retirement Study (HRS), I use a difference-in-differences model to show that being eligible for Social Security, and surviving cancer, increases the probability of retirement by 11.2 for male workers. Given the increase in both cancer survival rates, and the number of older workers in the labour force, it is important to know if cancer is causing permanent exits, in a population who otherwise would continue working. %I Dublin, UCD School of Economics, University College Dublin %G eng %4 Cancer/Employment/Retirement/Labour market/soclal security/retirement planning %$ 999999 %0 Journal Article %J Journal of Public Economics %D 2015 %T Asset accumulation and labor force participation of disability insurance applicants %A Shu, Pian %K Consumption and Savings %K Disabilities %K Employment and Labor Force %K Health Conditions and Status %K Net Worth and Assets %K Other %K Social Security %K Women and Minorities %X This paper provides empirical evidence of the existence of forward-looking asset-accumulation behavior among disability-insurance applicants, previously examined only in the theoretical literature. Using panel data from the RAND Health and Retirement Study, I show that rejected applicants for Social Security Disability Insurance (SSDI) possess significantly more assets than accepted applicants immediately prior to application and exhibit lower attachment to the labor force. These empirical results are consistent with the theoretical prediction in Diamond and Mirrlees (1978) and Golosov and Tsyvinski (2006) that certain individuals with high unwillingness to work maximize utility by planning in advance for their future disability insurance application. Because the existing empirical literature on disability insurance does not account for this intertemporal channel, it may underestimate the total work-disincentive effect of SSDI. (C) 2015 Elsevier B.V. All rights reserved. %B Journal of Public Economics %I 129 %V 129 %P 26-40 %G eng %4 Asset accumulation/Disability insurance/Labor force participation/disability insurance/Asset accumulation/Disability/Disability/Economics of the Elderly,/Economics of the Handicapped/Non-labor Market Discrimination/Social Security/Health Behavior/Participation/Labor supply %$ 999999 %R 10.1016/j.jpubeco.2015.06.002 %0 Report %D 2015 %T Does Retirement Improve Health and Life Satisfaction? %A Gorry, Aspen %A Gorry, Devon %A Sita Nataraj Slavov %K Health Conditions and Status %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly. We find little evidence that retirement influences health care utilization. %G eng %U http://www.nber.org/papers/w21326.pdf %4 Health Status/Retirement planning/life satisfaction/life satisfaction/public policy/social security earnings and benefits/pensions %$ 999999 %0 Report %D 2015 %T Does Social Security Continue to Favor Couples? %A Nadia S. Karamcheva %A April Yanyuan Wu %A Alicia H. Munnell %K Divorce %K Marriage %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X While dramatic increases in women’s labor supply and earnings have led to a substantial decline in the fraction of women eligible for spouse benefits at retirement, most wives still receive a survivor benefit, as wives still typically have lower earnings than their husbands and live longer. Using the MINT microsimulation model and the HRS data linked with Social Security administrative earnings records, this paper examines the extent to which Social Security continues to favor couples and will do so in the future. The paper finds that while the OASI program still distributes lifetime income from singles to couples, the transfers appear to be shrinking over time. Nevertheless, couples are still projected to have a higher benefit/tax ratio, a lower median net tax rate, and a higher share of them will be receiving positive net transfers from the system as compared to those who are never married or divorced. The increased labor force participation and earnings of women have contributed significantly to the decline in redistribution from men to women, and from singles to couples, while the effect of declining marriage rates has only a modest effect. %I Center for Retirement Research at Boston College %C Chestnut Hills, MA %P 1-44 %8 06/2015 %G eng %U http://crr.bc.edu/wp-content/uploads/2015/06/wp_2015-111.pdf %0 Journal Article %J J Ment Health Policy Econ %D 2015 %T The effects of income on mental health: evidence from the social security notch. %A Ezra Golberstein %K Age Factors %K Aged %K Aged, 80 and over %K Female %K Humans %K Income %K Male %K Mental Health %K Models, Econometric %K Retirement %K Sex Factors %K Social Security %K Socioeconomic factors %K United States %X

BACKGROUND: Mental health is a key component of overall wellbeing and mental disorders are relatively common, including among older adults. Yet the causal effect of income on mental health status among older adults is poorly understood.

AIMS: This paper considers the effects of a major source of transfer income, Social Security retirement benefits, on the mental health of older adults.

METHODS: The Social Security benefit "Notch" is as a large, permanent, and exogenous shock to Social Security income in retirement. The "Notch" is used to identify the causal effect of Social Security income on mental health among older ages using data from the AHEAD cohort of the Health and Retirement Study.

RESULTS: We find that increases in Social Security income significantly improve mental health status and the likelihood of a psychiatric diagnosis for women, but not for men.

DISCUSSION: The effects of income on mental health for older women are statistically significant and meaningful in magnitude. While this is one of the only studies to use plausibly exogenous variation in household income to identify the effect of income on mental health, a limitation of this work is that the results only directly pertain to lower-education households.

IMPLICATIONS: Public policy proposals that alter retirement benefits for the elderly may have important effects on the mental health of older adults.

%B J Ment Health Policy Econ %I 18 %V 18 %P 27-37 %8 2015 Mar %G eng %N 1 %1 http://www.ncbi.nlm.nih.gov/pubmed/25862202?dopt=Abstract %2 PMC4494112 %4 mental Health/social Security/older adults/psychiatric diagnosis/household income %$ 999999 %0 Journal Article %J Journal of Public Economics %D 2015 %T Effects of social security policies on benefit claiming, retirement and saving %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Event History/Life Cycle %K Health Conditions and Status %K Methodology %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X 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 is estimated with Health and Retirement Study data. Alternative beliefs about the future of Social Security affect claiming behavior. 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. 2015 Elsevier B.V. %B Journal of Public Economics %I 129 %V 129 %P 51-62 %G eng %U http://www.scopus.com/inward/record.url?eid=2-s2.0-84939170804andpartnerID=40andmd5=5f9a5d50350fd2d4594bc7142c636dc6 %4 Aging/Benefit claiming/Dynamic models/Intertemporal choice/Life cycle/Pensions/Retirement/Saving/Social Security %$ 999999 %R 10.1016/j.jpubeco.2015.07.005 %0 Thesis %D 2015 %T Essays in Household Savings and Portfolio Choice %A Dal Borgo, Mariela %K Net Worth and Asset %K Net Worth and Assets %K Risk Taking %K Social Security %K Women and Minorities %X The first part of this thesis presents a decomposition of household savings. One of the explanations for the wealth gap is that households with the same income level and demographic characteristics present differences in saving rates. This issue has been studied for African American versus Whites, but has not been directly addressed for Hispanics. Using pre-retirement data from the Health and Retirement Study, I compute saving rates as the ratio of wealth change to income over the years 1992-1998 and 1998-2004. In a regression framework I find that Mexican Americans, but not other Hispanics, have lower saving rates than Whites, even after controlling for income and socio-demographic factors. The inclusion of Social Security (S.S.) and pension wealth widens the gap further, which reflects the lack of pensions' coverage among Mexican Americans. In contrast, the difference between African Americans and Whites is only significant when retirement assets are not added to total wealth, consistent with the equalizing effect of S.S.. Then I conduct a regression decomposition for the mean gap in saving rates and find that: i) the component of the Mexican American-White differential not explained by observable characteristics becomes significant when S.S. and pensions are included; ii) with or without retirement assets the unexplained racial gap disappears; and iii) income and education are the main predictors of the savings gaps. The second and third parts investigate the effect of bankruptcy protection on households' portfolio choice. The debtor protection provided by the U.S. personal bankruptcy law reduces exposure to uninsurable risks: it allows defaulters to discharge unsecured debt and to protect a certain amount of home equity. A reduction in background risk - for example, resulting from labor or entrepreneurial income - can affect the demand for risky financial assets. Thus, the bankruptcy protection can affect ex ante households' willingness to tilt the financial portfolio towards those assets. On the one hand the implicit consumption insurance may lead to higher risk-taking by increasing the consumption floor if there is a negative wealth shock ("risk-taking channel"). On the other hand, more generous bankruptcy provisions will lead to a reduction in the demand for stock via: i) a higher probability of bankruptcy, since stocks are lost in bankruptcy because they are not protected ("protection channel"); or ii) worse credit market conditions -less access to credit at a higher price-, since higher bankruptcy protection implies a reduction of the collateral ("credit market channel"). In the context of a portfolio choice model, in the second chapter I illustrate how the bankruptcy protection can affect risk-taking through the "risk-taking channel" and the "protection channel". In the third part, I examine empirically the relationship between bankruptcy protection and stock market participation by exploiting the variation in that protection across states and over time. I find that doubling the amount of home equity that can be protected reduces stock ownership by 2 p.p. at intermediate protection levels ($22,000 to $90,000). This decline is restricted to high-asset and high-income households, which are more likely to participate in the stock market. Since poor rather than rich households are affected by worse credit market conditions when bankruptcy becomes more generous, the "credit market channel" is not a plausible mechanism. I do not find any effect of higher protection on the share of stocks in liquid assets, which suggests that the bankruptcy protection does not affect households' risk appetite. My findings are consistent with unprotected rather than risky assets becoming less attractive as the level of protection increases, as predicted by the "protection channel". %I University of Warwick %C Coventry, UK %V Ph. D. %G eng %9 Ph. D. %4 Portfolio Choice %! Essays in Household Savings and Portfolio Choice %0 Thesis %D 2015 %T Essays on Health Insurance and Annuities %A Shepard, Mark %K Medicare/Medicaid/Health Insurance %K Methodology %K Net Worth and Assets %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Insurance creates an important source of economic well-being by providing for beneficiaries in times of need. But because a variety of forces may inhibit the proper functioning of insurance markets, governments are deeply involved through regulation, subsidies, and direct provision of insurance. This dissertation studies insurance demand, supply, and the role of policy in two types of markets of direct interest to policymakers: health insurance and annuities. I highlight the importance of both traditional market failures (adverse selection and moral hazard) and less standard factors like limited competition (market power) and puzzlingly low insurance demand to influence insurance market outcomes. In the first chapter, I study how health insurers compete in individual insurance markets like those established in the Affordable Care Act. I focus on the role of an increasingly important benefit: plans' networks of covered medical providers. Using data from Massachusetts' pioneer insurance exchange, I show evidence of substantial adverse selection against plans covering the most expensive and prestigious academic hospitals. Individuals loyal to the prestigious hospitals both select plans covering them and are more likely to use these hospitals' high-price care. Standard risk adjustment does not capture their higher costs driven by preferences for using high-price providers. To study the welfare implications of network-based selection, I estimate a structural model of hospital and insurance markets and use the model to simulate insurer competition on premiums and hospital coverage in an insurance exchange. I find that with fixed hospital prices, adverse selection leads all plans to exclude the prestigious hospitals. Modified risk adjustment or subsidies can preserve coverage, benefitting those who value the hospitals most but raising costs enough to offset these gains. I conclude that adverse selection encourages plans to limit networks and star academic hospitals to lower prices, with the welfare implications depending on whether those high prices fund socially valuable services. Chapter 2 also studies health insurance exchanges and the competitive effect of a policy design choice: how the level of subsidies is determined. In the Affordable Care Act exchanges and other programs, subsidies depend on prices set by insurers – as prices rise, so do subsidies. I show that these "price-linked" subsidies incentivize higher prices, with a magnitude that depends on how much insurance demand rises when the price of uninsurance (the mandate penalty) increases. To estimate this effect, I use two natural experiments in the Massachusetts subsidized insurance exchange. In both cases, I find that a $1 increase in the relative monthly mandate penalty increases plan demand by about 1%. Using this estimate, my model implies a sizable distortion of $48 per month (about 12%). This distortion has implications for the tradeoffs between price-linked and exogenous subsidies in many public insurance programs. I discuss an alternate policy that would eliminate the distortion while maintaining many of the benefits of price-linked subsidies. Chapter 3 studies demand for annuities – insurance products that protect retirees against outliving their assets. Standard life cycle theory predicts that individuals facing uncertain mortality will annuitize all or most of their retirement wealth. Researchers seeking to explain why retirees rarely purchase annuities have focused on imperfections in commercial annuities – including actuarially unfair pricing, lack of bequest protection, and illiquidity in the case of risky events like medical shocks. I study the annuity choice implicit in the timing of Social Security claiming and show that none of these can explain why most retirees claim benefits as early as possible, effectively choosing the minimum annuity. Most early claimers in the Health and Retirement Study had sufficient liquidity to delay Social Security longer than they actually did and could have increased lifetime consumption by delaying. Because the marginal annuity obtained through delay is better than actuarially fair, standard bequest motives cannot explain the puzzle. Nor can the risk of out-of-pocket nursing home costs, since these are concentrated at older ages past the break-even point for delayed claiming. Social Security claiming patterns, therefore, add to the evidence that behavioral explanations may be needed to explain the annuity puzzle. %I Harvard University %C Cambridge, MA %G eng %4 early claiming %! Essays on Health Insurance and Annuities %0 Journal Article %J Journal of Pension Economics and Finance %D 2015 %T How much do respondents in the health and retirement study know about their contributions to tax-deferred contribution plans? A cross-cohort comparison %A Irena Dushi %A Honig, Marjorie %K Employment and Labor Force %K Pensions %K Social Security %X We use information from Social Security earnings records to examine the accuracy of survey responses regarding participation in tax-deferred pension plans. As employer-provided defined benefit pensions are replaced by voluntary contribution plans, employees' understanding of the link between their annual contributions and their post-retirement wealth is becoming increasingly important. We examine the extent to which wage-earners in the Health and Retirement Study (HRS) correctly report their inclusion in tax-deferred contribution plans and, conditional on inclusion, their annual contributions. We use three samples representing different cohorts in three different periods: the original HRS cohort interviewed in 1992 at ages 51-56, the War Babies cohort interviewed in 1998 at ages 51-56, and the Early Baby Boomer cohort interviewed in 2004 at the same ages. Our findings indicate that while respondents interviewed in 1998 and 2004 were more likely to correctly report whether they were included in defined contribution plans, they were no more accurate when reporting whether they had contributed to their plans than respondents interviewed in 1992. Contributors in the three cohorts, moreover, overstated their annual contributions and thus would be likely to realize lower than expected account balances at retirement. The magnitude of this error is not negligible. In all three cohorts, the mean reporting error (the absolute difference between respondent-reported and Social Security earnings record contributions) was approximately 1.5 times larger than the mean contribution in the W-2 earnings record. Copyright Cambridge University Press 2014 This is a work of the U.S. Government and is not subject to copyright protection in the United States. %B Journal of Pension Economics and Finance %I 14 %V 14 %P 203-239 %G eng %N 3 %4 DC plans/employee knowledge/tax-deferred contributions/W-2 records %$ 999999 %R 10.1017/S1474747214000237 %0 Journal Article %J American Journal of Health Economics %D 2015 %T The Impact of Social Security Income on Cognitive Function at Older Ages %A Padmaja Ayyagari %A Frisvold, David %K Cognition %K cognitive function %K Social Security %K Social Security Benefits %X Prior literature has documented a positive association between income and cognitive function at older ages, however, the extent to which this association represents causal effects is unknown. In this study, we use an exogenous change in Social Security income due to amendments to the Social Security Act in the 1970s to identify the causal impact of Social Security income on cognitive function of elderly individuals. We find that higher benefits led to significant improvements in cognitive function and that these improvements in cognition were clinically meaningful. Our results suggest that interventions even at advanced ages can slow the rate of decline in cognitive function. %B American Journal of Health Economics %G eng %U http://www.nber.org/papers/w21484 %R 10.3386/w21484 %0 Report %D 2015 %T The Impact of Temporary Assistance Programs on the Social Security Claiming Age %A Geoffrey T. Sanzenbacher %A April Yanyuan Wu %A Matthew S. Rutledge %K Older Adults %K Public Health %K Public Policy %K Social Security %K Welfare %X Delaying claiming past the early eligibility age of 62 has taken on increased importance. Individuals turning 62 with no job and limited income may be able to use temporary assistance programs such as Unemployment Insurance (UI), Medicaid, and the Supplemental Nutrition Assistance Program (SNAP) as sources of support prior to collecting Social Security benefits. To what extent do these programs allow recipients to delay Social Security claiming? The challenge in answering this question stems from the fact that program users’ dire economic straits may make them more likely to claim benefits from both Social Security and these programs, generating a misleading correlation between Social Security claiming and temporary assistance benefits. This paper constructs instruments for program generosity that vary with an individual’s state of residence but should not reflect the characteristics or circumstances of the individual. %I Center for Retirement Research at Boston College %C Chestnut Hill, MA %P 1-331 %G eng %U http://crr.bc.edu/wp-content/uploads/2015/10/wp_2015-27.pdf %0 Journal Article %J The Journal of the Economics of Ageing %D 2015 %T The long reach of education: Early retirement %A Steven F Venti %A David A Wise %K disability insurance %K Education %K Retirement %K Social Security %X The goal of this paper is to draw attention to the long lasting effect of education on economic outcomes. We use the relationship between education and two routes to early retirement – the receipt of Social Security Disability Insurance (DI) and the early claiming of Social Security retirement benefits – to illustrate the long-lasting influence of education. We find that for both men and women with less than a high school degree the median DI participation rate is 6.6 times the participation rate for those with a college degree or more. Similarly, men and women with less than a high school education are over 25 percentage points more likely to claim Social Security benefits early than those with a college degree or more. We focus on four critical “pathways” through which education may indirectly influence early retirement – health, employment, earnings, and the accumulation of assets. We find that for women health is the dominant pathway through which education influences DI participation. For men, the health, earnings, and wealth pathways are of roughly equal magnitude. For both men and women the principal channel through which education influences early Social Security claiming decisions is the earnings pathway. We also consider the direct effect of education that does not operate through these pathways. The direct effect of education is much greater for early claiming of Social Security benefits than for DI participation, accounting for 72% of the effect of education for men and 67% for women. For women the direct effect of education on DI participation is not statistically significant, suggesting that the total effect may be through the four pathways. %B The Journal of the Economics of Ageing %V 6 %P 133 - 148 %G eng %U http://www.sciencedirect.com/science/article/pii/S2212828X15000201 %R https://doi.org/10.1016/j.jeoa.2015.08.001 %0 Journal Article %J EBRI Notes %D 2015 %T A Look at the End-of-Life Financial Situation in America %A Sudipto Banerjee %K Housing %K Net Worth and Assets %K Social Security %X This paper takes a comprehensive look at the financial situation of older Americans at the end of their lives. In particular, it documents the percentage of households with a member who recently died with few or no assets. It also documents the income, debt, home-ownership rates, net home equity, and dependency on Social Security for households that experienced a recent death. Significant findings include that among those who died at ages 85 or above, 20.6 percent had no non-housing assets and 12.2 percent had no assets left. Among singles who died at or above age 85, 24.6 percent had no non-housing assets left and 16.7 percent had no assets left. Data show those who died at earlier ages were generally worse off financially: 29.8 percent of households that lost a member between ages 50 and 64 had no assets left. Households with at least one member who died earlier also had significantly lower income than households with all surviving members. The report shows that among singles who died at ages 85 or above, 9.1 percent had outstanding debt (other than mortgage debt) and the average debt amount for them was 6,368. The report also shows that the importance of Social Security to older households cannot be overstated. For recently deceased singles, it provided at least two-thirds of their household income. Couple households above 75 with deceased members received more than 60 percent of their household income from Social Security. The data for this study come from the University of Michigan s Health and Retirement Study (HRS), which is sponsored by the National Institute on Aging, and is the most comprehensive national survey of older Americans. %B EBRI Notes %I 36 %V 36 %P 2-10 %G eng %N 4 %4 Home equity/Home ownership/Household income/Social Security benefits/Wealth %$ 999999 %0 Journal Article %J Economics Letters %D 2015 %T Reconsidering the social security notch and retirement: Wealth and incentive effects %A Jeremy G. Moulton %A Ann H. Stevens %K Retirement Planning and Satisfaction %K Social Security %X Using the Health and Retirement Study, we show that studies using the Social Security Notch cannot separately identify the effects of retirement wealth and forward-looking incentives on retirement because the Notch natural experiment changed both factors in offsetting ways. 2015 Elsevier B.V. %B Economics Letters %I 132 %V 132 %P 65-68 %G eng %U http://www.scopus.com/inward/record.url?eid=2-s2.0-84928951822andpartnerID=40andmd5=1eeb34855b4e851f9fe1d8f8d1571926 %4 Notch/Retirement/Social security %$ 999999 %R 10.1016/j.econlet.2015.04.016 %0 Report %D 2015 %T The Retirement and Social Security Benefit Claiming of U.S. Military Retirees %A Knapp, David %A Asch, Beth %A Hosek, James %A Mattock, Michael %K Demographics %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X After serving 20 years in the active component of the U.S. military, service members can retire from the military, as young as age 38, and begin collecting a monthly pension benefit for the remainder of their life. In this paper, we ask: do active duty military retirees exit the labor force earlier or later because of their access to military retirement benefits? Do they alter their Social Security claiming decisions? We theorize that access to a consistent source of income may encourage earlier retirement through a standard income effect, but the military pension may also increase a retiree s post-military job search, allowing for a greater wage and improved job satisfaction due to a better employer-employee match. Access to a steady source of pension income may also reduce short-term liquidity constraints, encouraging military retirees to delay claiming their Social Security benefit in order to benefit from delayed retirement. We estimate the impact of military retiree pension income on retirement empirically using the 1992 Health and Retirement Study cohort. We identify the military pension effect in a difference-in-difference model by exploiting a surprise change in military-retiree benefits in 2001 that extended Tricare health benefits to Medicare eligible military retirees and their spouses through the end of their lives. TFL eliminated the need to purchase Medigap coverage, thereby eliminating a cost that could cut into disposable income from their military annuity. A key limitation of the analysis is that the HRS includes relatively few military retirees. %I Ann Arbor, MI, Michigan Retirement Research Center %G eng %4 retirement/veterans/Social Security/benefit claiming %$ 999999 %0 Journal Article %J Journal of Retirement %D 2015 %T Why Retirees Claim Social Security at 62 and How It Affects Their Retirement Income: Evidence from the Health and Retirement Study %A Glickman, Mark M. %A Sharon Lynn Hermes %K Retirement Planning and Satisfaction %K Social Security %X Despite higher monthly benefits for those who delay, many people still claim Social Security retirement benefits at age 62, the earliest age of eligibility. This study uses data from the Health and Retirement Study to examine the demographic and occupational characteristics associated with early claiming, as well as the retirement income of early claimers compared with those who delay. The authors find that several work-related factors may cause people to claim Social Security benefits early and suggest they may face challenges in continuing to work at older ages. For example, those who worked in physically demanding blue-collar jobs were 55 more likely to claim benefits prior to their full retirement age, after controlling for other factors, compared with those in all other occupations. Other factors, such as having lower expectations of living to age 75 significantly increase the likelihood of claiming early. The median income for those who claim at full retirement age or later was 45 higher after claiming benefits than for those who claimed early and 33 higher at age 72. Even when comparing early and delayed claimers with similar total income after claiming, average household income for delayed claimers was higher at age 72 than for early claimers. %B Journal of Retirement %I 2 %V 2 %P 25-39 %G eng %N 3 %4 retirement planning/early Retirement/social Security %$ 999999 %R 10.3905/jor.2015.2.3.025 %0 Report %D 2015 %T Will the Average Retirement Age Continue to Increase? %A Matthew S. Rutledge %A Gillis, Christopher M. %A Anthony Webb %K Employment and Labor Force %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Using Health and Retirement Study (HRS) data, this paper examines how changes in individual workers past and present pension coverage, retirement incentives in Social Security, and retiree health insurance have contributed to retirement decisions for the 1931-1953 birth cohorts. It then uses these findings to project retirement behavior for the 1955-1987 cohorts in the Survey of Income and Program Participation (SIPP). A key assumption is that younger cohorts will have no defined benefit (DB) pensions or retiree health coverage in their future jobs. A key limitation is the assumption of a stable relationship in each successive cohort between each factor and labor market decisions. %I Boston, MA, Center for Retirement Research at Boston College %G eng %4 retirement planning/labor market decisions/retiree health insurance/social Security/pensions %$ 999999 %0 Report %D 2014 %T The Effect of Social Security Auxiliary Spouse and Survivor’s Benefits on the Household Retirement Decision %A Knapp, David %K Retirement Decision %K Social Security %K Spouse Benefits %X In 2011,12.9 million age-qualifying Americans received $112 billion in spouse and survivor’s benefits from Social Security based on their husband or wife’s earnings history. The Spouse’s Benefit alone, while representing less than 4% of annual Social Security ld-age expenditures, amounts to $24 billion, which is larger than the individual 2012 budgets of 27 states, Canada’s total military expenditures ($22.5b, 2013), and the entire Federal budget for assistance to families with dependent children (TANF - $17.6b, 2012).1 Initially called the “wife’s benefit”, these benefits were introduced in 1939 when only 15% of households had two earners, compared to over 72% for households retiring after 1992.2 No study has examined the effect of both the Spouse and Survivor’s Benefits on household retirement behavior because of the complexity associated with estimating a structural model of interconnected household decisions. This study answers the question: how responsive are husbands’ and wives’ retirement decisions to Spouse and Survivor’s Benefits? %I University of Michigan %C Ann Arbor, United States %8 08/2014 %G eng %U http://crr.bc.edu/wp-content/uploads/2014/06/Panel-3_3-Knapp1.pdf %0 Thesis %D 2014 %T Essays in applied economics %A Sacks, Daniel W. %Y Doraszelski, Uli Seim Katja %K Health Conditions and Status %K Healthcare %K Income %K Net Worth and Assets %K Public Policy %K Social Security %X Essay 1 studies physician agency problems, which arise whenever physicians fail to maximize their patients' preferences, given available information. These agency problems are well documented, but the magnitude of their welfare consequences for patients---the losses from suboptimal treatment choice induced by agency---are unclear. I infer patient drug preference from their compliance decisions. I begin by showing that initial prescriptions respond to physician financial incentives to control costs and to pharmaceutical detailing, but compliance does not, pointing to agency problems. I then develop and estimate a model of physician-patient interactions where physician write initial prescriptions, but patients choose whether to comply. Fully eliminating agency problems increases compliance by 6.5 percentage points, and raises patient welfare by 22\% of drug spending. Contracts that better align doctor and patient preferences can improve patient welfare, but attain only half the gains from eliminating agency completely. Although physician agency problems reduce patient welfare, eliminating them is thus likely difficult. Essay 2, co-authored with Alexander M. Gelber and Damon Jones, studies frictions in adjusting earnings to changes in the Social Security Annual Earnings Test (AET) using a panel of Social Security Administration microdata on one percent of the U.S. population from 1961 to 2006. Individuals continue to "bunch" at the convex kink the AET creates even when they are no longer subject to the AET, consistent with the existence of earnings adjustment frictions in the U.S. We develop a novel estimation framework and estimate in a baseline case that the earnings elasticity with respect to the implicit net-of-tax share is 0.23, and the fixed cost of adjustment is $152.08. Essay 3 studies the impact of health expenditure risk on annuitization. Theoretical research suggests that such risk can have an ambiguous influence on the annuitization decisions of the elderly. I provide empirical evidence on this linkage, by estimating the impact of supplemental Medicare insurance (Medigap) coverage on the annuity demand of older Americans. Medigap coverage has a strong impact on annuitization: the extensive margin elasticity is 0.39, the overall elasticity of private annuity income with respect to Medigap coverage is 0.56. These results are robust to controls for health, wealth, and preferences, as well as other robustness tests. They suggest that medical expenditure risk has a large impact on underannuitization. %I University of Pennsylvania %C Philadelphia, PA %V 3622123 %P 244 %8 2014 %G English %9 Ph.D. %M 1545895881 %4 Annuitization %$ 999999 %! Essays in applied economics %0 Thesis %D 2014 %T A holistic approach to understanding retirement preparedness %A Yook, Miyoung %Y Britt, Soyna %K Adult children %K Health Conditions and Status %K Healthcare %K Methodology %K Retirement Planning and Satisfaction %K Social Security %X There has been increased interest in understanding the significant disparity in U.S. households' retirement preparedness due to concern about the stability of Social Security benefits, the shift from defined benefit plans to defined contribution plans, and the decreased rate of saving. This dissertation explores a model that can be utilized to understand and enhance retirement preparedness by individuals, educators, practitioners, and policy makers. Retirement preparedness was measured in two different ways--using the income replacement rate and the capital accumulation ratio--for two separate empirical models. The general conceptualization of the framework is based on the retirement planning work of Hershey (2004). This study utilized the 2008 Rand version (Version L) of the Health and Retirement Study (HRS) and 2006, 2008, and 2010 psychosocial and lifestyle questionnaire. The Rand HRS data file is a user-friendly version of the HRS data and contains cleaned data. The two hierarchical regressions were used to analyze the association between retirement preparedness and the theoretical concepts of cultural influence, environmental influence, task components, and psychological influence. Entering the conceptual components as four separate blocks allows for observation of changes in R 2 based on the addition of the conceptual components. This research investigates the following research questions: (a) How strongly are cultural influences associated with retirement preparedness?, (b) How strongly are environmental influences associated with retirement preparedness?, (c) How strongly are task components associated with retirement preparedness?, and (d) How strongly are psychological influences associated with retirement preparedness? Current retirement planning practices are often based on structural profiles such as financial resources, financial needs, and goals. The holistic approach used for this dissertation is based on the awareness of the influence of psychological and personal factors on financial decision making. The results showed that the variables positively associated with the retirement income replacement rate were self-perception of aging, homeownership, stock ownership, household pension ownership, IRA/Keogh ownership, and business ownership. Pre-retirement income log had a highly negative association with the retirement income replacement ratio. Big Five personality and perceived mastery were not significant. However, when asset ownership (excluding homeownership) was not controlled, conscientiousness and low emotional stability became significant and showed a positive association for conscientiousness and a negative association for low emotional stability. Self-perception of aging was a significant psychological variable in both models. The significant variables from the second model measured by the capital accumulation ratio were asset ownerships including homeownership, stock ownership, IRA ownership, real estate ownership, and business ownership. None of the psychological variables were significant, except for agreeableness, which was related negatively to the capital accumulation ratio when the asset ownerships (excluding home ownership) were not controlled. Other significant variables, when asset ownership was not controlled, were home ownership, pre-retirement income log, being non-White. %I Kansas State University %C Manhattan, KS %V 3639324 %P 258 %8 2014 %G English %U http://proxy.lib.umich.edu/login?url=http://search.proquest.com/docview/1621575221?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&rfr_id=info:sid/ProQuest+Dissertations+%26+Theses+A%26I&rft_val_fmt=info:ofi/fmt: %9 Ph.D. %M 1621575221 %4 individual and family studies %$ 999999 %! A holistic approach to understanding retirement preparedness %0 Journal Article %J Journal of Pension Economics and Finance %D 2014 %T How is economic hardship avoided by those retiring before the Social Security entitlement age? %A Kevin Milligan %K Health Conditions and Status %K Income %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Governments around the world are reacting to extended lifespans and troubled pension finances by increasing the age of retirement benefit entitlement. This paper studies those who retire before the age of full pension entitlement in the USA using data drawn from the Health and Retirement Study. The major finding is that four out of five people who have zero earnings at pre-entitlement ages are able to find a way to lift their incomes over the poverty line. For men, pension and annuity income are important while for women, spousal income helps most to get them over the line. %B Journal of Pension Economics and Finance %I 13 %V 13 %P 420-438 %G eng %N 4 %4 pensions/poverty/retirement/Social Security/old age pensions/pension income/annuity income/household income %$ 999999 %R 10.1017/S1474747214000171 %0 Journal Article %J Social Security Bulletin %D 2014 %T Immigrants and retirement resources %A P. Sevak %A Lucie Schmidt %K Demographics %K Net Worth and Assets %K Retirement Planning and Satisfaction %K Social Security %X The extensive literature documenting differences in wages between immigrant and native-born workers suggests that immigrants may enter retirement at a significant financial disadvantage relative to workers born in the United States. However, little work has examined differences in retirement resources and retirement security between immigrants and natives. In this article, we use data from the Health and Retirement Study linked with restricted data from the Social Security Administration to compare retirement resources of immigrants and natives. Our results suggest that while immigrants have lower levels of Social Security benefits than natives, when holding demographic characteristics constant, immigrants have higher levels of net worth. The estimated immigrant differentials vary a great deal by number of years in the United States, with the most recent immigrants being the least prepared for retirement. %B Social Security Bulletin %I 74 %V 74 %P 27-45 %G eng %U http://www.scopus.com/inward/record.url?eid=2-s2.0-84896524474andpartnerID=40andmd5=976830d676d69e4ce7cb6b6bbe280982 %N 1 %4 social security/claiming behavior/claiming behavior/Immigrant/retirement resources/retirement planning/net worth %$ 999999 %0 Thesis %D 2014 %T Improving retirement security in the United States %A Burns, Michael J. %Y Nathanson, Stephen %K Cross-National %K Health Conditions and Status %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X The public media, surveys of workers and the general public have indicated increasing concern with retirement security in the face of lengthening life expectancies, the costs of retirement living, and anxieties over the reported insufficiency of retirement savings balances to fund a decent retirement. The major questions of this dissertation are, first, whether the major parts of the United States retirement income security system, namely Social Security and the private pension system, are currently providing sufficient retirement security for all retirees? And second, how could this national system be reformed, if necessary, to provide greater retirement income security? Because the problem of elderly security is an international one, the United States retirement income security system is compared to those of some of the other economically advanced countries of the OECD (Organization for Economic Cooperation and Development), and more particularly, France, Sweden and Japan. An assessment of the contrasting design elements and retirement income security outcomes is made. Recommendations for reform of the United States system are offered which are based on an appraisal of the peculiar strengths and weaknesses of the United States system as well as on any promising design elements of the other examined national systems that might be adaptable to the United States. %I Northeastern University %C Boston %V 3642719 %P 351 %8 2014 %G English %U http://proxy.lib.umich.edu/login?url=http://search.proquest.com/docview/1609374280?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&rfr_id=info:sid/ProQuest+Dissertations+%26+Theses+A%26I&rft_val_fmt=info:ofi/fmt: %9 Ph.D. %M 1609374280 %4 Public policy %$ 999999 %! Improving retirement security in the United States %0 Journal Article %J Public Finance and Management %D 2014 %T Involuntary Retirement, U.S. Social Security Program Participation and the Great Recession %A Seligman, Jason S. %K Disabilities %K Employment and Labor Force %K Health Conditions and Status %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Involuntary retirement covers economic and health related dislocations. Over 1992-2011, three-in-ten retirees in the Health and Retirement Study (HRS) report an involuntary retirement. Roughly half of these involuntary retirements are health-related. Following the Great Recession, involuntary retirement in the U.S. grew much faster than voluntary retirement. I find that while the population receiving Social Security retirement benefits grew 6 slower than average, the population receiving no public retirement or disability benefits grew 79 faster than average and the population reporting health-related involuntary retirement grew 270 faster than average. While incomes are found to have fallen for all retiree groups, those reporting health-related involuntary retirements are found to have retirement income declines of 38 and the lowest pre-retirement incomes of any measured group. These findings suggest patterns of vulnerability that have important implications for proposals seeking to reform the U.S. Social Security Program. %B Public Finance and Management %I 14 %V 14 %P 329-356 %G eng %U http://proxy.lib.umich.edu/login?url=http://search.proquest.com/docview/1667944354?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004andctx_enc=info:ofi/enc:UTF-8andrfr_id=info:sid/ProQ 3Aeconlitshellandrft_val_fmt=info:ofi/fmt:kev:mtx:journa %N 3 %4 Social Security/Public Pensions/Health Behavior/Economics of the Elderly, Economics of the Handicapped, Non-labor Market Discrimination/Retirement planning/Retirement Policies/Public Policy/labor Force Participation/Disability/Disability/Social Security %$ 999999 %0 Thesis %D 2014 %T Job Displacement, Retirement and the Roles of Government Programs among Older American Workers %A Liu, Jieruo %Y Hugo Benítez-Silva %K Demographics %K Employment and Labor Force %K Methodology %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X The world has been going through one of worst economic recessions in history with severe job market downturns. In October 2009, the U.S. civilian unemployment rate reached a historical 10% and nearly 50% of the unemployed exhausted their 26-week regular Unemployment Insurance (UI) benefits and in consequence, UI was extended to 99 weeks. This dissertation examines the empirical facts of job displacement among the older American workers during the recent economic crisis, and studies their subsequent labor market and retirement decisions, with focus on the roles of government programs including UI and Social Security Old-Age Benefits (OA). Job displacement is empirically shown to have both short term and long term negative effects on workers' future employment. While young and prime-aged workers usually increase labor supply to compensate for the drops in assets and incomes, it is ambiguous how older workers would response and whether premature retirement would follow. For workers who are approaching their retirement age when OA becomes available, both OA and UI could be claimed for that purpose. The extent to which they rely on these two programs is affected by factors including age, wealth, income profiles and the institutional details of UI and OA. Using data from the Health and Retirement Study (HRS), I estimate a dynamic life-cycle utility maximization model with separate decisions on consumption/savings, labor market status and OA take-ups. With the structural model, I am able to isolate the effects of changes in UI coverage from changes in other relevant aspects including changes in the Normal Retirement Age (NRA), and analyze such effects in a deteriorating labor market. I conduct several experiments on UI generosities and evaluate the consequences on the mean individual as well as across the distributions of wealth and income. I find that in a severe labor market downturn, those who are on the lower end of wealth and income distributions are forced to claim OA early while the wealthier and high-income individuals typically postpone OA claiming to reduce early claiming penalties. However, with the extra help of a 99-week UI, some of the poor and low-income individuals can also afford to postpone OA claiming using UI as a stepping-stone. Specifically, among those who originally claim OA at an early 62 years old during a severe labor market downturn, 6.34% of the poorest individuals and 2.52% of the lowest-incomers postpone OA take-ups, resulting in slight increases in the average OA entitlement ages. However, the role of UI as a stepping stone is more prominent among those with high income profiles whose OA take-ups are postponed for almost a quarter year. %I State University of New York at Stony Brook %C Stony Brook, NY %V 3641823 %P 111 %8 2014 %G English %U http://proxy.lib.umich.edu/login?url=http://search.proquest.com/docview/1622999516?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&rfr_id=info:sid/ProQuest+Dissertations+%26+Theses+A%26I&rft_val_fmt=info:ofi/fmt: %9 Ph.D. %M 1622999516 %4 Socioeconomic Differences %$ 999999 %! Job Displacement, Retirement and the Roles of Government Programs among Older American Workers %0 Report %D 2014 %T Left with Bias? Quantile Regression with Measurement Error in Left Hand Side Variables %A Stacy, Brian %K Methodology %K Public Policy %K Social Security %X This paper examines the effect of measurement error in the dependent variable on quantile regression, because unlike OLS regression, even classical measurement error can generate bias. I examine the pattern and size of the bias using both simulation and an empirical example. The simulations indicate that classical error can cause bias and that non-classical measurement error, particularly heteroskedastic measurement error, has the potential to produce substantial bias. Also, the size and direction of the bias depends on the amount of heterogeneity in the effects across quantiles and the regression error distribution. Using restricted access Health and Retirement Study data containing matched IRS W-2 earnings records, I examine whether estimates of the returns to education statistically differ using a precisely measured and mismeasured earnings variable. I find that returns to education are over-stated by roughly 1 percentage point at the median and 75th percentile using earnings reported by survey respondents. %I Hamburg, Germany, German National Library of Economics Leibniz Information Centre for Economics %G eng %4 methodology/measurement error/regression Analysis/W-2 records/Economics of education %$ 999999 %0 Report %D 2014 %T Lifetime Job Demands, Work Capacity at Older Ages, and Social Security Benefit Claiming Decisions %A Lauren Hersch Nicholas %K Employment and Labor Force %K Health Conditions and Status %K Retirement Planning and Satisfaction %K Social Security %X We use Health and Retirement Study data linked to the Department of Labor s O Net classification system to examine the relationship between lifetime exposure to occupational demands and retirement behavior. We consistently found that both non-routine cognitive analytic and non-routine physical demands were associated with worse health, earlier labor force exit, and increased use of Social Security Disability Insurance. The growing share of workers in jobs with high levels of cognitive demand may contribute to growth in DI use. %I Boston, Center for Retirement Research at Boston College %G eng %4 retirement behavior/occupational demand/Social Security Disability Insurance/labor force exit/cognitive decline %$ 999999 %0 Journal Article %J Journal of Pension Economics and Finance %D 2014 %T Mismeasurement of pensions before and after retirement: the mystery of the disappearing pensions with implications for the importance of Social Security as a source of retirement support %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Net Worth and Assets %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X A review of the literature suggests that when pension values are measured by the wealth equivalent of promised defined benefit pension benefits and defined contribution balances for those approaching retirement, pensions account for more support in retirement than is suggested when their contribution is measured by incomes received directly from pension plans by those who have already retired. Estimates from the Health and Retirement Study for respondents in their early fifties suggest that pension wealth is about 82 as valuable as Social Security wealth. In data from the Current Population Survey (CPS), for members of the same cohort, measured when they are 65-69, pension incomes are about 58 as valuable as incomes from Social Security. Our empirical analysis uses data from the HRS to examine the reasons for these differences in the contributions of pensions as measured in income and wealth data. Key factors accounting for these differences include: a difference in methodology between surveys affecting what is included in pension income; some pension wealth 'disappears' at retirement because respondents change their pension into other forms that are not counted as pension income; and the form of annuitization may influence the measure of pension income. A series of caveats notwithstanding, the bottom line is that CPS data on pension incomes received in retirement understates the full contribution pensions make to supporting retirees. PUBLICATION ABSTRACT %B Journal of Pension Economics and Finance %I 13 %V 13 %P 1-26 %G eng %N 1 %4 pensions/retirement planning/Public Policy/social security wealth/wealth/Defined benefit plans/Defined contribution pension plans/pension income %$ 69340 %0 Report %D 2014 %T Representativeness of the Low-Income Population in the Health and Retirement Study with Supplementary Analyses for 1991 and 1997 %A Erik Meijer %A Lynn A Karoly %K Income %K Methodology %K Social Security %X We study to what extent the Health and Retirement Study (HRS) is representative of all income groups, but with a particular emphasis on low-income groups. To focus on the HRS sample composition and abstract from potential measurement issues associated with measures of income and program participation, we exploit the SSA administrative data matched to the HRS sample and compare their distribution against the distribution of the same variables for the same population in the SSA databases. We find that overall, for cohorts and years that can be most reliably compared, the distributions are very similar and conclude that the HRS is representative for the population it covers. However, for some subgroups in the low-income population (e.g., recipients of Supplemental Security Income, Medicaid beneficiaries), there are some differences and thus we caution against estimating population totals for such small subpopulations. The HRS samples for which restricted matched administrative data are available are often not representative of a broad population of interest, because not all HRS respondents were asked permission to match in any given year. Therefore, the restricted HRS datafiles are generally not suitable for estimating population distributions, although they are still very useful for modeling purposes. %I Ann Arbor, MI, Michigan Retirement Research Center (MRRC) Working Paper, WP 2014-316 %G eng %4 social Security/ADMINISTRATIVE DATA/income Distribution/sample Design %$ 999999 %0 Report %D 2014 %T Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement - Introduction and Summary %A Courtney Coile %A Kevin Milligan %A David A Wise %K Social Security %X This is the introduction and summary to the sixth phase of an ongoing project on Social Security Programs and Retirement Around the World. The first phase described the retirement incentives inherent in plan provisions and documented the strong relationship across countries between social security incentives to retire and the proportion of older persons out of the labor force. The second phase documented the large effects that changing plan provisions would have on the labor force participation of older workers. The third phase demonstrated the consequent fiscal implications that extending labor force participation would have on net program costs–reducing government social security benefit payments and increasing government tax revenues. The fourth phase presented analyses of the relationship between the labor force participation of older persons and the labor force participation of younger persons in twelve countries. We found no evidence that increasing the employment of older persons will reduce the employment opportunities of youth and no evidence that increasing the employment of older persons will increase the unemployment of youth. The fifth phase on "Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms" was intended to set the stage for this current phase. This sixth phase of the ongoing ISS project is particularly related to the fifth phase (Wise, 2012) and the second phase (Gruber and Wise, 2004) of the project. This volume continues the focus of the previous volume on DI programs while extending the methodology to study retirement behavior used in the second phase to focus in particular on the effects of the DI programs. The key question this volume seeks to address is: given health status, to what extent are differences in labor force participation across countries determined by the provisions of disability insurance programs? %I NBER %G eng %U http://www.nber.org/papers/w20120 %R 10.3386/w20120 %0 Journal Article %J Social Security Bulletin %D 2014 %T The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees in the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Employment and Labor Force %K Income %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This article uses Health and Retirement Study data to investigate the effects of Social Security's Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) on Social Security benefits received by households. The provisions reduce benefits for individuals or the dependents of individuals whose work histories include jobs for which they were entitled to a pension and were not subject to Social Security payroll taxes ( noncovered employment). We find that about 3.5 percent of households are subject to either the WEP or the GPO, and that the provisions reduce the present value of their Social Security benefits by roughly one-fifth. Households affected by both provisions experience benefit reductions of about one-third. Under the WEP, the Social Security benefit reduction is capped at one-half of the amount of the pension from noncovered employment, which substantially reduces the WEP penalty and prevents the WEP adjustment from falling disproportionately on households in the lowest earnings category. %B Social Security Bulletin %I 74 %V 74 %P 55-69 %G eng %N 3 %4 Retirement Policies/Wage Level and Structure/Wage Differentials/Public Sector Labor Markets/labor Force Participation/Earnings/Pensions/Public Employee/Social Security/Windfall Elimination Provision/Government Pension Offset %$ 999999 %0 Thesis %D 2014 %T Three essays in labor economics and the economics of education %A Stacy, Brian %Y Steven Haider %K Demographics %K Employment and Labor Force %K Methodology %K Public Policy %K Social Security %X In the first chapter of my dissertation, I examine the robustness of typical teacher quality measures to alternate ranking systems factoring in the dispersion of value-added. The typical measure used by researchers and school administrators to evaluate teachers is based on how the students' achievement increases after being exposed to the teacher, or based on the teacher's ``value-added''. When teacher value-added is heterogeneous across her students, then the typically used measure reflects differences in the average value-added the teacher provides. However, researchers, administrators, and parents may care not just about the average value-added, but also its variance. Encouragingly, ranking systems factoring in the dispersion produce similar rankings as the ranking system based only on the mean. In the second chapter, I examine the effect of measurement error in the dependent variable on quantile regression, because unlike OLS regression, even classical measurement error can generate bias. I examine the pattern and size of the bias using both simulation and an empirical example. The simulations indicate that classical error can cause bias and that non-classical measurement error, particularly heteroskedastic measurement error, has the potential to produce substantial bias. Using restricted access Health and Retirement Study data containing matched IRS W-2 earnings records, I examine whether estimates of the returns to education statistically differ using a precisely measured and mismeasured earnings variable. I find that returns to education are over-stated by roughly 1 percentage point at the median and 75th percentile using earnings reported by survey respondents. In the third chapter, my coauthors and I investigate how the precision and stability of a teacher's value-added estimate relates to student characteristics. We find that the year-to-year stability of teacher value-added estimates can depend on the previous achievement level of a teacher's students. The stability level of the estimates are typically 25% to more than 50% larger for teachers serving initially higher performing students. We offer a policy simulation demonstrating that teachers who serve low-achieving students may be differentially likely to be the recipient of sanctions in a high stakes policy based on value-added estimates. %I Michigan State University %C East Lansing, MI %V 3634483 %P 103 %8 2014 %G English %U http://proxy.lib.umich.edu/login?url=http://search.proquest.com/docview/1612354970?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&rfr_id=info:sid/Dissertations+%26+Theses+%40+CIC+Institutions&rft_val_fmt=info:of %9 Ph.D. %M 1612354970 %4 Education Policy %$ 999999 %! Three essays in labor economics and the economics of education %0 Book Section %B Safety Nets and Benefit Dependence %D 2014 %T What Impact Does Old-Age Pension Receipt Have on the Use of Public Assistance Programs Among the Elderly? %A Norma B Coe %A April Yanyuan Wu %E Carcillo, Stéphane %E Immervoll, Herwig %E Stephen P. Jenkins %E Königs, Sebastian %E Tatsiramos, Konstantinos %K Health Conditions and Status %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %B Safety Nets and Benefit Dependence %I Emerald Group Publishing %C Bingley, UK %P 259-290 %G eng %4 social Security/old age pensions/retirement planning/Public assistance %$ 999999 %! What Impact Does Old-Age Pension Receipt Have on the Use of Public Assistance Programs Among the Elderly? %0 Journal Article %J Journal of Family and Economic Issues %D 2014 %T Women s Timing of Receipt of Social Security Retirement Benefits %A Gillen, Martie %A Claudia J Heath %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X The 2000 2006 waves of Health and Retirement Study data were used to estimate the effects of human capital characteristics and income sources on women s timing of receipt of Social Security retirement benefits. Using logistic regression, the likelihood of early election of benefits was increased by earnings regardless of marital status; and, for married women, by husband s age being greater than wife s, and by other income. For married women, education decreased the likelihood of electing early benefits. For unmarried women, IRA/annuity income reduced the likelihood of early receipt of benefits. Using multinomial logistic regression, the likelihood of combinations of expected and actual benefit receipt options were estimated. A greater percentage of married, compared to unmarried, women expected and elected early benefits. %B Journal of Family and Economic Issues %I 35 %V 35 %P 362-375 %G eng %U http://dx.doi.org/10.1007/s10834-013-9374-z %N 3 %4 Social Security/Women/Retirement benefits/Retirement %$ 999999 %R 10.1007/s10834-013-9374-z %0 Report %D 2013 %T Asset Accumulation and Labor Force Participation of Disability Insurance Applicants %A Shu, Pian %K Disabilities %K Employment and Labor Force %K Social Security %X Using panel data from the RAND Health and Retirement Study, I show that rejected applicants for the Social Security Disability Insurance (SSDI) possess significantly more assets immediately prior to their application and exhibit lower labor force attachement than accepted applicants. These finding are consistent with the theoretical prediction that disability insurance may enourage individuals to save more in the present and plan to apply for disability benefits in the future, regardless of the state of their future health. Because the current empirical literature does not account for this intertemporal channel, it may underestimate the total work disincentive effect of SSDI. %I Cambridge, MA, Harvard Business School %G eng %4 Social Security Disability Insurance/labor Force Attachment/disability benefits/work disincentive %$ 999999 %0 Thesis %D 2013 %T A Bumpy Road: Asset Accumulation, Unexpected Life Course Events, and Later Life Economic Security %A Sullivan, Laura Anne %Y Shapiro, Thomas M. %K Net Worth and Assets %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This dissertation examines retirement security through an analysis of asset holdings among today's older adults, with a particular focus pre-retirees, who are near retirement. The research seeks to better understand households' retirement resources and later life economic vulnerabilities by: 1.) assessing existing assets among all older U.S. households (51+) and exploring the racial wealth gap among this group; 2.) measuring the direction and magnitude of impacts from several household level economic shocks on the wealth of older households; and 3.) investigating how households prepare for retirement and approach retirement saving. Several theoretical frameworks help to guide the study including the life-cycle hypothesis of saving established by economist Modigliani, life course scholarship by sociologists Elder, Rank, and Kemp, the assets framework expounded by Sherraden and Shapiro, and the institutional model of savings. The mixed-methods study integrates analysis from the Health and Retirement Study (HRS), providing a longitudinal look at the assets of older households 51+ for a decade from 1998 to 2008, and data from semi-structured qualitative interviews. Multivariate fixed effects regression on the panel data assesses the long-term impacts of household economic shocks on wealth. The data reveal largely inadequate savings overall and the racial wealth gap, which has been documented among the general U.S. population, remains large for older adults 51+. The analysis reveals significant negative declines in wealth due to common household events for older adults. Qualitative semi-structured interviews among 16 individuals close to or recently retired (ages 50-65) reveal barriers to saving for retirement such as limited financial knowledge about savings mechanisms, inadequate income sources, and unexpected financial events. The data also point to the important role of institutional structures in shaping retirement decisions. Given the challenges in saving for retirement at the household level, policy should seek to support programs which pool risk across groups, such as Social Security and pensions. Evidence from the study suggests that household-level strategies are likely to be limited in their effectiveness without adequate institutional mechanisms for fostering retirement resources. %I Brandeis University, The Heller School for Social Policy and Management %C Waltham, MA %V 3562811 %P 198 %8 2013 %G English %U http://search.proquest.com.proxy.lib.umich.edu/docview/1399591939?accountid=14667http://mgetit.lib.umich.edu/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&rfr_id=info:sid/ProQuest+Dissertations+%26+Theses+A%26I&rft_val_fmt=info:ofi/fmt:kev:mtx:dissertat %9 Ph.D. %M 1399591939 %4 Public policy %$ 999999 %! A Bumpy Road: Asset Accumulation, Unexpected Life Course Events, and Later Life Economic Security %0 Report %D 2013 %T Does Household Debt Influence the Labor Supply and Benefit Claiming Decisions of Older Americans? %A Barbara A Butrica %A Nadia S. Karamcheva %K Debt %K Labor %K Social Security %K Social Security Benefits %K Social Security linkage %X Americans’ indebtedness has increased dramatically since the 1980s – a trend likely to have important implications for retirement security. This study finds that older adults with debt are 8 percentage points more likely to work and 2 percentage points less likely to receive Social Security benefits than those without debt. Not only does the presence of debt influence older adults’ behavior, but so do the amount and type of debt – particularly outstanding mortgages. Increasingly, retirement security will depend on having enough income and assets to pay for basic living expenses and to service debt. %B Center for Retirement Research %I Boston College %8 12/2013 %G eng %U https://crr.bc.edu/working-papers/does-household-debt-influence-the-labor-supply-and-benefit-claiming-decisions-of-older-americans-2/ %0 Report %D 2013 %T The Effect of Local Labor Demand Conditions on the Labor Supply Outcomes of Older Americans %A Nicole Maestas %A Kathleen J Mullen %A David Powell %K Employment and Labor Force %K Retirement Planning and Satisfaction %K Social Security %X A vast literature in labor economics has studied the relationship between local labor demand shifts and the outcomes of the working age population. This literature has ignored the impacts that these shocks have on older individuals, though there are reasons to believe that the effects are not uniform by age. Using data from the Census and the Health and Retirement Study, we measure the effects of local labor demand conditions on a host of outcomes for older individuals including employment, retirement, Social Security claiming, wages, and job characteristics. We find that local labor demand conditions do affect the labor and retirement behavior of the older segment of the population, including Social Security claiming decisions. We also find evidence that older individuals are especially responsive to local labor demand shifts in the service industry, which we show has observably different job characteristics that may be especially attractive to older workers. Similarly, we find evidence that labor demand shocks not only increase the wages of older workers but also make the jobs more attractive on non-pecuniary dimensions. %I RAND %G eng %4 labor supply/labor Force Participation/social security/claiming decisions/retirement planning/older workers %$ 999999 %0 Journal Article %J Review of Economic Dynamics %D 2013 %T The effect of social security, health, demography and technology on retirement %A Ferreira, Pedro Cavalcanti %A dos Santos, Marcelo Rodrigues %K Demographics %K Employment and Labor Force %K Health Conditions and Status %K Medicare/Medicaid/Health Insurance %K Retirement Planning and Satisfaction %K Social Security %X This article studies the determinants of the labor force participation of the elderly and investigates the factors that may account for the increase in retirement in the second half of the last century. We develop a lifecycle general equilibrium model with endogenous retirement that embeds Social Security legislation and Medicare. Individuals are ex ante heterogeneous with respect to their preferences for leisure and face uncertainty about labor productivity, health status and out-of-pocket medical expenses. The model is calibrated to the U.S. economy in 2000 and is able to reproduce very closely the retirement behavior of the American population. It reproduces the peaks in the distribution of Social Security applications at ages 62 and 65 and the observed facts that low earners and unhealthy individuals retire earlier. It also matches very closely the increase in retirement from 1950 to 2000. Changes in Social Security policy which became much more generous and the introduction of Medicare account for most of the expansion of retirement. In contrast, the isolated impact of the increase in longevity was a delaying of retirement. %B Review of Economic Dynamics %I 16 %V 16 %P 350-370 %G eng %U http://www.sciencedirect.com/science/article/pii/S1094202513000057 %N 2 %4 Retirement planning/labor Force Participation/Social security/health Status/Health shocks/Medicare/Aging population %$ 69320 %R http://dx.doi.org/10.1016/j.red.2013.01.003 %0 Report %D 2013 %T Effects of Social Security Policies on Benefit Claiming, Retirement and Saving %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Healthcare %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X 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. %I Cambridge, MA, National Bureau of Economic Research %G eng %U http://www.nber.org/papers/w19071 %4 Retirement/Saving/Behavior/Social Security claiming rates/retirement planning/Public Policy %$ 69298 %0 Report %D 2013 %T Estimates of the Potential Insurance Value of Disability Insurance for Individuals with Mental Health Impairments %A John Bound %A Caswell, Kyle J. %A Timothy A Waidmann %K Health Conditions and Status %K Public Policy %K Social Security %X Since the mid-1980s there has been dramatic growth in the number and fraction of DI and SSI beneficiaries with mental illness. With longer life expectancies and younger ages of disability onset than beneficiaries with physical impairments, their growth exerts added fiscal pressure on the programs. While not specifically focused on mental illness, fears of an increase in the duration (and thus prevalence) of disability claims that may result from this demographic shift have generated calls to tighten eligibility rules again. Using data from the Health and Retirement Study linked to SSA administrative records, we created statistically matched control groups of non-beneficiaries with severe mental illness. We then estimated the earnings, income, and health insurance coverage among rejected DI/SSI applicants with mental illness who have characteristics comparable to persons awarded benefits on the basis of mental impairments. We found that even after controlling for health and demographic characteristics, DI beneficiaries were substantially worse off than rejected applicants in terms of wealth and income. While these rejected applicants with mental illness were worse off than those with physical impairments, our findings suggests that the programs successfully select applicants with the greatest income needs,and that retrenchment could result in significant hardship. %I Ann Arbor, MI, University of Michigan Retirement Research Center %G eng %4 Social Security Disability Insurance/Supplemental Security Income/Mental illness/Public Policy/Disabilities %$ 69286 %0 Report %D 2013 %T How Do the Changing Labor Supply Behavior and Marriage Patterns of Women Affect Social Security Replacement Rates? %A April Yanyuan Wu %A Nadia S. Karamcheva %A Alicia H. Munnell %A Patrick J. Purcell %K Adult children %K Employment and Labor Force %K Social Security %K Women and Minorities %X This paper seeks to determine the impact of the changing lives of women increased labor force participation/earnings and reduced marriage rates on Social Security replacement rates. First, our estimates, based on the Health and Retirement Study and Modeling Income in the Near Term, show that Social Security replacement rates have dropped sharply at both the household- and individual-level, and the decline will continue for future retirees. Our second finding is that this aggregate change masks a complex relationship between replacement rates and the marital status and income levels of individuals. The decline in replacement rates over time is largest for married couples with husbands whose earnings are in the top tercile. Decomposing the reasons for the overall decline shows that increases in the labor supply and earnings of women explain more than one-third of the change. In contrast, the impact of changing marital patterns is relatively small. Much of the remaining explanation rests with the increased Full Retirement Age and changing claiming behaviors. %I Chestnut Hill, MA, Center for Retirement Research at Boston College %G eng %4 women/labor force participation/marriage/social security/claiming behavior/claiming behavior %$ 999999 %0 Report %D 2013 %T How Important Is Medicare Eligibility in the Timing of Retirement? %A Norma B Coe %A Khan, Mashfiqur R. %A Matthew S. Rutledge %K Medicare/Medicaid/Health Insurance %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Eligibility for Medicare at age 65 is widely viewed as an important factor in retirement decisions. However, it has been difficult to quantify the influence of Medicare because eligibility for Medicare came at the same age as Social Security s Full Retirement Age (FRA). The recent rise in the FRA, along with other changes, has decoupled the age-related incentives in the two programs, making it easier to estimate the effect of Medicare eligibility on the timing of retirement. This brief, based on a recent study, provides such estimates of the importance of Medicare on retirement decisions. %I Boston, Center for Retirement Research at Boston College %G eng %4 Medicare/retirement planning/social Security/Public Policy %$ 69314 %0 Journal Article %J Journal of Comparative Family Studies %D 2013 %T Motives for Care that Adult Children Provide to Parents: Evidence from Point Blank Survey Questions %A Cox, Donald %A Beth J Soldo %K Adult children %K Healthcare %K Methodology %K Other %K Risk Taking %K Social Security %X Adult children who care for aging parents. incur costs along psychic, monetary, emotional, and even physical dimensions. What motivates them? Is it altruism, guilt, obligation, or gratitude? Perhaps the anticipation of a bequest? Familial norms, or desire for recognition? Understanding motivation for care is high on the agenda of both economics and sociology. A primary focus of economics is the prospect that public transfers may supplant or stimulate private transfers, depending on the motivation of the private donor. Motives are usually inferred indirectly, on the basis of observed behavior. In contrast, sociologists focus on how familial bonds and networks might be forged and maintained. We depart from each of these approaches to focus on direct questions from a special module in the Health and Retirement Study, which contains questions on motivations for, and concerns about, the provision of familial assistance. Our (deliberately) simple descriptive work reveals abundant new information about motivation for familial transfers and care. These not always provided free of pressure from relatives, for example, and obligations and traditions appear to matter. Findings suggest that the standard economic considerations like utility interdependence or exchange provide an incomplete account of transfer behavior, and that insights from sociological models are essential. We also find that women are far more likely to provide care and take seriously family obligations. Past experience in the provision of financial help and care matters as well, sometimes in intriguingly anomalous ways. Though self-reported motivations must be interpreted carefully, we nonetheless conclude that point-blank questions provide a worthwhile complement to conventional methods for unraveling motivations for private, intergenerational transfers. %B Journal of Comparative Family Studies %I 44 %V 44 %G eng %N 4 %4 Family responsibilities/Old age risk/Social security financing/Evaluation/Data analysis/Elder care/Informal care %$ 69136 %0 Report %D 2013 %T Recent Changes in the Gains from Delaying Social Security %A John B. Shoven %A Sita Nataraj Slavov %K Retirement Planning and Satisfaction %K Social Security %X Social Security retirement benefits can be claimed at any age between 62 and 70, with delayed claiming resulting in larger monthly payments. In Shoven and Slavov (2013), we show that claiming later increases the present value of lifetime benefits for most individuals. However, this has not always been the case. During the late 1990s and early 2000s, a number of policy changes increased the gains from delay, particularly for couples. In addition, mortality improved and real interest rates fell substantially over this period, further increasing the attractiveness of delay. We perform simulations to examine the role of these factors in changing the gains from delay. We find that the gains from delay increased substantially after 2000, with changes in the interest rate playing the largest role in driving the increase. Using data from the Health and Retirement study, we show that individuals who turned 62 after 2000 are indeed more likely to delay than those who turned 62 before 2000. However, even in the younger cohort, most individuals still claim benefits soon after turning 62. Moreover, we find no evidence of a relationship between the probability of delay and the individual characteristics (e.g., gender, race, or health status) that affect the gains from delay. %I Cambridge, MA, National Bureau of Economic Research %G eng %4 social Security/claiming behavior/claiming behavior/retirement benefits/Delayed Retirement %$ 999999 %0 Journal Article %J Journal of Pension Economics and Finance %D 2013 %T Redistribution under the Social Security benefit formula at the individual and household levels, 1992 and 2004 %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Adult children %K Income %K Pensions %K Social Security %K Women and Minorities %X Studies using data from the early 1990s suggested that while the progressive Social Security benefit formula succeeded in redistributing benefits from individuals with high earnings to individuals with low earnings, it was much less successful in redistributing benefits from households with high earnings to households with low earnings. Wives often earned much less than their husbands. As a result, much of the redistribution at the individual level was effectively from high earning husbands to their own lower earning wives. In addition, spouse and survivor benefits accrue disproportionately to women from high income households. Both factors mitigate redistribution at the household level. It has been argued that with the increase in the labor force participation and earnings of women, Social Security now should do a better job of redistributing benefits at the household level. To be sure, when we compare outcomes for a cohort with a household member age 51 to 56 in 1992 with those from a cohort born twelve years later, redistribution at the household level has increased over time. Nevertheless, as of 2004 there still is substantially less redistribution of benefits from high to low earning households than from high to low earning individuals. %B Journal of Pension Economics and Finance %I 12 %V 12 %P 1-27 %G eng %N 1 %4 Social Security/Redistribution/Benefits/Spouse benefits/Survivor benefits/Benefit formula/Womens earnings/Family %$ 69144 %R 10.1017/s1474747212000108 %0 Report %D 2013 %T Social Security Benefit Claiming and Medicare Utilization %A John Bound %A Helen G Levy %A Lauren Hersch Nicholas %K Medicare/Medicaid/Health Insurance %K Retirement Planning and Satisfaction %K Social Security %X Are early Social Security claimers too sick to work? We linked Health and Retirement Study data to Medicare claims to study health care utilization at ages 65 and 70. We find that Social Security Disability Insurance recipients use more health care on average than those who never received DI. At age 65, Medicare spending on SSDI recipients was 4,440 less than spending on retirees who claimed Social Security benefits prior to Full Retirement Age (FRA) and 4,727 less than those claiming at FRA. Differences in Medicare spending persist at all points of the spending distribution. They are robust to a variety of methodological approaches including general linear models, quantile regression, and reweighting, and in specifications limiting comparisons to beneficiaries claiming benefits at initial EEA. Our results suggest that poor health may contribute to EEA claiming decisions, though this group is considerably healthier than those who were too disabled to work and qualified for DI benefits. %I Ann Arbor, MI, University of Michigan Retirement Research Center %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/pdf/wp281.pdf %4 social security/claiming behavior/claiming behavior/Medicare/Social Security Disability Insurance/early claiming %$ 999999 %0 Report %D 2013 %T The Social Security Windfall Elimination and Government Pension Offset Provisions for Public Employees in the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper uses data from the Health and Retirement Study to investigate the effects of Social Security s Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) provision on Social Security benefits received by individuals and households. WEP reduces the benefits of individuals who worked in jobs covered by Social Security and also worked in uncovered jobs where a pension was earned. WEP also reduces spouse benefits. GPO reduces spouse and survivor benefits for persons who worked in uncovered government employment where they also earned a pension. Unlike previous studies, we take explicit account of pensions earned on jobs not covered by Social Security, a key determinant of the size of WEP and GPO adjustments. Also unlike previous studies, we focus on the household. This allows us to incorporate the full effects of WEP and GPO on spouse and survivor benefits, and to evaluate the effects of WEP and GPO on the assets accumulated by affected families. Among our specific findings: About 3.5 percent of households are subject to either WEP or to GPO. The present value of their Social Security benefits is reduced by roughly one fifth. This amounts to five to six percent of the total wealth they accumulate before retirement. Households affected by both WEP and GPO lose about one third of their benefit. Limiting the Social Security benefit to half the size of the pension from uncovered employment reduces the penalty from WEP for members of the original HRS cohort by about 60 percent. %I Ann Arbor, The University of Michigan %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/pdf/wp288.pdf %4 public Pensions/retirement planning/social Security/Public Policy/government pension offset/windfall elimination provision %$ 69116 %0 Journal Article %J Journal of Poverty %D 2013 %T SSI Participation Among the Elderly: A Hazard Model Approach %A Jin H. Kim %K Demographics %K Event History/Life Cycle %K Methodology %K Other %K Retirement Planning and Satisfaction %K Social Security %X This study revisits the historic policy concern over nonparticipation in the Supplemental Security Income (SSI) program. The most contemporary research model suggests that from a cross-sectional perspective, the elderly take-up decision is primarily determined by the financial situation of the eligible individuals. Yet extant studies have yet to establish a longitudinal model of SSI participation that explicitly takes into account the changing circumstances of the elderly. As such, this study extends the current literature by exploring the time-varying processes leading to eventual take-up of benefits among the elderly. Methodologically, the research relies on event history analysis of data from the Health and Retirement Study spanning the years 1996 to 2006 to explain the varying rates of participation over time as well as the role of life events on the take-up decision. 2013 Copyright Taylor and Francis Group, LLC. %B Journal of Poverty %I 17 %V 17 %P 217-233 %G eng %N 2 %4 elderly/event history analysis/longitudinal analysis/survival analysis/take-up/retirement planning/supplemental Security Income %$ 69160 %R 10.1080/10875549.2013.775994 %0 Thesis %D 2013 %T Three essays in public economics %A Anderson, Michael Throan %Y John Karl Scholz %K Health Conditions and Status %K Methodology %K Net Worth and Assets %K Other %K Public Policy %K Social Security %X The first and second chapters of this dissertation consider household financial decision making. In the first chapter I examine the phenomenon of early claiming for Social Security retirement benefits. Previous work has shown that early claiming, in particular by the primary earner in married couples, is not consistent with household benefit maximization nor is it predicted by models of utility maximization. I show that observed claiming behavior is explained well by a model in which the primary earner chooses when to claim without taking into consideration the effect of the choice on the secondary earner's spousal and survivor benefits. I find that the decrease in the value of household benefits due to early claiming is borne almost entirely by the surviving spouse. In the second chapter, with John Karl Scholz and Ananth Seshadri, we use the insight of a lifecycle model to better understand the factors that affect household retirement savings targets. Two of the most important determinants of savings targets are households' location in the lifetime income distribution and number of children. We measure the deviation of a set of financial guidelines for retirement saving from the optimal asset accumulation implied by the lifecycle model and suggest an alternate savings heuristic that takes into account insights from the lifecycle model. The third chapter applies a novel estimation strategy to measure the benefit of hazardous waste site remediation. In contrast to previous estimates, this method calculates the benefit of site remediation allowing for diminishing marginal utility. Using data on home sales in Cincinnati, Ohio in 2000 I find the median willingness to pay for a one mile increase to the nearest hazardous waste site is $228 per year. This is lower than previous estimates which range from $284 to $1,065 per year. %I The University of Wisconsin - Madison %C Madison, WI %V 3592578 %P 124 %8 2013 %G English %9 Ph.D. %M 1436977212 %4 0438:Environmental economics %$ 999999 %0 Journal Article %J J Women Aging %D 2013 %T Women's receipt of Social Security retirement benefits: expectations compared to elections. %A Gillen, Martie %A Claudia J Heath %K Age Factors %K Aged %K Decision making %K Female %K Humans %K Longitudinal Studies %K Middle Aged %K Pensions %K Retirement %K Social Security %K Socioeconomic factors %K Time Factors %K United States %X

This research contributes knowledge regarding the options of early, normal, or delayed receipt of Social Security retirement benefits and research-based findings regarding women's expected and actual timing of election of Social Security retirement benefits. First, descriptive analyses of alternative retirement options, based on Social Security retirement benefit rules, are provided. Second, the 2000, 2002, 2004, and 2006 waves of Health and Retirement Study (HRS) data are used to analyze women's anticipated and actual election of Social Security retirement benefits. Third, based on these considerations, recommendations are made regarding Social Security retirement benefit receipt alternatives.

%B J Women Aging %I 25 %V 25 %P 321-36 %8 2013 %G eng %N 4 %1 http://www.ncbi.nlm.nih.gov/pubmed/24116993?dopt=Abstract %4 retirement planning/Delayed Retirement/Womens studies/Social security/Women/Retirement benefits %$ 69336 %R 10.1080/08952841.2013.816219 %0 Report %D 2012 %T Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving %A Alan L Gustman %A Thomas L. Steinmeier %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper specifies three behavioral variants of a structural model of retirement and saving to bring predicted Social Security claiming rates closer to the rates observed in the data. The model, estimated with Health and Retirement Study data, is used to examine three potential policies: increasing early entitlement age, increasing normal retirement age, and eliminating payroll taxes after normal retirement age. Behavioral responses to increasing early entitlement age and eliminating the payroll tax are not affected by the behavioral variant used. Predicted effects of increasing the normal retirement age exhibit more sensitivity. Heterogeneity shapes the responses to these policy changes. %B MRDRC Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/behavioral-effects-of-social-security-policies-on-benefit-claiming-retirement-and-saving/ %4 social security/Claiming behavior/Claiming behavior/early Retirement/retirement planning/Payroll tax/Public Policy %$ 69836 %0 Report %D 2012 %T The Changing Causes and Consequences of Not Working Before Age 62 %A Barbara A Butrica %A Nadia S. Karamcheva %K Consumption and Savings %K Disabilities %K Employment and Labor Force %K Net Worth and Assets %K Public Policy %K Social Security %X This study uses the Health and Retirement Study to deepen our understanding of nonworking adults ages 51 to 61 and how they support themselves before qualifying for Social Security benefits. The results show that nonworking adults ages 51 to 61 are a heterogeneous group. A large share is poor, with low incomes and limited wealth. But a sizeable share has low incomes and abundant wealth. These individuals are income poor but asset rich. More than for singles, this phenomenon characterizes nonworking married adults. In general, we find that nonworking married adults are significantly better off than their unmarried counterparts. Many nonworking married adults have working spouses. On average, married adults without earnings have twice the per person income and more than ten times the per person assets of single adults without earnings. Additionally, married adults without earnings are 20-30 percentage points less likely to be poor than single adults without earnings. It is important for policymakers to understand who stops working early and how they support themselves. Nonworkers may be more likely to apply and qualify for Social Security disability and SSI benefits. Also, more than any other group, nonworkers will be adversely impacted by any increases to the early entitlement age. Finally, nonworkers are especially vulnerable in retirement because they are likely to have lower savings, Social Security benefits, and pensions than workers. %B Urban Institute Discussion Paper %I The Urban Institute %C Washington, D.C. %G eng %U https://www.urban.org/sites/default/files/publication/23531/412801-The-Changing-Causes-and-Consequences-of-Not-Working-before-Age-.PDF %4 Social Security/Public Policy/DISABILITY/DISABILITY/Asset accumulation/Saving/labor Force Participation %$ 62864 %0 Report %D 2012 %T Changing Sources of Income Among the Aged Population %A Barry Bosworth %A Burke, Kathleen %K Income %K Income and wealth %K Social Security %K Wealth %X This paper focuses on an explanation for the large shift over the past two decades in the composition of the income of the aged (65+), increasing the role of earned income and reducing the importance of income from their own assets. We find that the pattern of change is consistently reported in all of the major household surveys. The increase in the importance of labor income can be attributed to delayed exit from the labor force by workers at older ages. We attribute the increase in work time to a rise in the proportion of more educated workers who choose to continue working, changes within the pension system that previously encouraged early retirement, and a decline in the availability of retiree health insurance. The increase in work time is concentrated among the highest income groups and those with the most education, suggesting that it is largely voluntary. The fall in asset income can be traced to lower interest rates and a reduced propensity for the aged to convert their wealth to annuities. It does not reflect reduced wealth at older ages. A measure of the annuity equivalent of their wealth holdings suggests that there has been no decline for aged units. We also find only a weak relationship between changes in asset income and the decision to remain in the workforce. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Newton, MA %G eng %U https://crr.bc.edu/working-papers/changing-sources-of-income-among-the-aged-population/ %0 Report %D 2012 %T The Decision to Delay Social Security Benefits: Theory and Evidence %A John B. Shoven %A Sita Nataraj Slavov %K Consumption and Savings %K Employment and Labor Force %K Public Policy %K Social Security %X Social Security benefits may be commenced at any time between age 62 and age 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit amount to reflect the age at which benefits are claimed. We investigate the actuarial fairness of this adjustment. Our simulations suggest that delaying is actuarially advantageous for a large subset of people, particularly for real interest rates of 3.5 percent or below. The gains from delaying are greater at lower interest rates, for married couples relative to singles, for single women relative to single men, and for two-earner couples relative to one-earner couples. In a two-earner couple, the gains from deferring the primary earner's benefit are greater than the gains from deferring the secondary earner's benefit. We then use panel data from the Health and Retirement Study to investigate whether individuals' actual claiming behavior appears to be influenced by the degree of actuarial advantage to delaying. We find no evidence of a consistent relationship between claiming behavior and factors that influence the actuarial advantage of delay, including gender and marital status, interest rates, subjective discount rates, or subjective assessments of life expectancy. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %4 Personal Finance/Social Security/Public Pensions/Public Policy/claiming behavior/claiming behavior/labor Force Participation %$ 62871 %R 10.3386/w17866 %0 Journal Article %J COPD %D 2012 %T The Disability burden of COPD. %A Thornton Snider, Julia %A J. A. Romley %A Ken S Wong %A Zhang, Jie %A Eber, Michael %A Dana P Goldman %K Aged %K Cost of Illness %K Disabled Persons %K Employment %K Female %K Humans %K Income %K Insurance, Disability %K Likelihood Functions %K Logistic Models %K Male %K Middle Aged %K Pulmonary Disease, Chronic Obstructive %K Social Security %K United States %X

Affecting an estimated 12.6 million people and causing over 100,000 deaths per year, chronic obstructive pulmonary disease (COPD) exacts a heavy burden on American society. Despite knowledge of the impact of COPD on morbidity, mortality, and health care costs, little is known about the association of the disease with economic outcomes such as employment and the collection of disability. We quantify the impact of COPD on Americans aged 51 and older-in particular, their employment prospects and their likelihood of collecting federal disability benefits-by conducting longitudinal regression analysis using the Health and Retirement Study. Controlling for initial health status and a variety of sociodemographic factors, we find that COPD is associated with a decrease in the likelihood of employment of 8.6 percentage points (OR = 0.58, 95% CI 0.50-0.67), from 44% to 35%. This association rivals that of stroke and is larger than those of heart disease, cancer, hypertension, and diabetes. Furthermore, COPD is associated with a 3.9 percentage point (OR 2.52, 95% CI 2.00-3.17) increase in the likelihood of collecting Social Security Disability Insurance (SSDI), from 3.2% to 7.1%, as well as a 1.7 percentage point (OR 2.87, 95% CI 2.02-4.08) increase in the likelihood of collecting Supplemental Security Income (SSI), from 1.0% to 2.7%. The associations of COPD with SSDI and SSI are the largest of any of the conditions studied. Our results are consistent with the hypothesis that COPD imposes a substantial burden on American society by inhibiting employment and creating disability.

%B COPD %V 9 %P 513-21 %8 2012 Aug %G eng %N 5 %1 http://www.ncbi.nlm.nih.gov/pubmed/22721264?dopt=Abstract %2 PMID: 22721264 (PMC in pr %4 chronic obstructive pulmonary disease/employment/disability/disability/Morbidity/Mortality/health care costs/social security/Social Security Disability Insurance/Supplemental Security Income %$ 69586 %R 10.3109/15412555.2012.696159 %0 Thesis %D 2012 %T Disability Insurance in General Equilibrium %A Wang, Ruwei %Y Young, Eric %K Disabilities %K Event History/Life Cycle %K Methodology %K Other %K Public Policy %K Social Security %X The Social Security Disability Insurance (DI) Program, which provides income protection to qualified workers who suffer from disabilities, is now facing rapid growth in the number of recipients. The DI program also discourages exit by workers whose health improves by penalizing work heavily. In the first chapter, I build a dynamic general equilibrium model to provide a quantitative analysis of the welfare effects of the DI program and the impact of DI policy reforms on the program's financial health and on worker behavior and welfare. A recently proposed policy to provide two extra years of partial benefits for DI beneficiaries returning to work would reduce the size of the DI beneficiary population, lowering total DI payments and the tax rate and raising welfare of a healthy newborn by 0.33%. Increasing the Social Security Normal Retirement Age from 65 to 67 raises the number of DI recipients by 8.9%. Policy changes strengthening the strictness of disability criteria increase social welfare mainly due to the reduction in the tax rate. Lastly, simulation results for the case of eliminating the DI program shows a large welfare gain in the new steady state, implying that the distortionary effects of taxation outweigh the gains from providing insurance. The second chapter takes into consideration that people can also obtain financial protection from public and private health insurance programs to have medical costs covered when they suffer health problems. I build a dynamic general equilibrium model to quantitatively analyze the impact of policy reforms on the DI program and on workers' behavior and welfare when Medicare, Medicaid, and employer-sponsored health insurance programs interact with the DI program. A policy change strengthening the strictness of the DI admission process increases social welfare mainly due to the reduction in the tax rate and the increase in the wage level. Expanding Medicaid eligibility, which is a provision in the Affordable Care Act, reduces the number of DI recipients by 4.0% and increases general equilibrium welfare by 0.1%. However, the welfare effects differ by education. %I University of Virginia %C Charlottesville, VA %V Ph.D. %G English %M 1151450347 %4 Economics %$ 69238 %0 Report %D 2012 %T Do Income Taxes Affect the Progressivity of Social Security? %A Norma B Coe %A Karamcheva, Zhenya %A Richard W Kopcke %A Alicia H. Munnell %K Income taxes %K Social Security %X Policymakers have designed Social Security to be a progressive retirement program that replaces a larger share of monthly earnings for low- and middleincome workers than for high earners. However, previous research has found that, although the Disability Insurance (DI) component of Social Security is very progressive, the Old-Age and Survivors Insurance (OASI) component may be less progressive than intended. One reason is that high earners tend to live longer than low earners. Since Social Security pays an annuity that lasts throughout retirement, it benefits high earners with greater longevity. Social Security’s progressivity may also be %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/briefs/do-income-taxes-affect-the-progressivity-of-social-security/ %0 Thesis %D 2012 %T Dynamic Models of Labor Supply and Retirement %A Fan, Xiaodong %Y John Kennan %K Employment and Labor Force %K Methodology %K Net Worth and Assets %K Other %K Retirement Planning and Satisfaction %K Social Security %X This dissertation contains three separate essays on the dynamic models of labor supply and retirement. The first essay documents "sharp retirement"--retirement accompanied by a discontinuous decline in labor supply--across three data sets, which previous literature found difficult to explain. I propose and estimate a life-cycle labor supply model with habit persistence wherein sharp retirement can be explained by workers quitting "cold turkey." In much the same way that one might quit smoking, workers with accumulated "working habit" exit the labor force with a pronounced, discontinuous decline in labor supply. The working habit model is consistent with the data, where workers reduce yearly labor supply by scaling back more in hours worked per week (over 50% reduction) than in weeks worked per year (20% reduction). The fixed costs approach, which has been the standard model used to understand sharp retirement, cannot explain these trends. After estimating the model, counterfactuals show that reducing Social Security benefits by 20% causes individuals work an additional 8.6 months. Individuals choosing sharp retirement respond mostly on the extensive margin by delaying retirement eight months, while individuals choosing smooth retirement respond mostly on the intensive margin by increasing yearly labor supply and delaying retirement only one month. The second essay develops and estimates a Ben-Porath human capital model in which individuals make decisions on consumption, human capital investment, labor supply, and retirement. The model allows both an endogenous wage process (which is typically assumed exogenous in the retirement literature) and an endogenous retirement decision (which is typically assumed exogenous in the human capital literature). This integration is important to obtain unbiased estimates, which are critical for most counterfactual analysis. For instance, when evaluating the effect of increasing the Social Security Normal Retirement Age (NRA) on workers' labor supply and retirement decisions, not only does one have to consider how the policy change affects the retirement decision directly, one also needs to consider how it affects the wage process and therefore affects retirement indirectly. We estimate the model using the Method of Simulated Moments to match the life-cycle profiles of wages and hours from the PSID data. Counterfactuals of delaying NRA and removing Social Security earnings test are conducted. We find significant increases in one individual's human capital investment at old ages, which leads to over 20% increase in the wage profile near retirement. Finally, the third essay tests for asymmetric employer learning in the labor market using a three-period model with a match component of wages. When a worker makes her quit/stay decision in a labor market with three periods, she must consider the signaling effect of her decision in subsequent periods. This breaks down some implications derived from two-period models, which are mostly used in the empirical literature. The unconditional quit rate is not necessarily negatively connected with ability in this three-period asymmetric learning model. I suggest two alternative hypothesis tests for asymmetric employer learning in the model. The first test scrutinizes the negative relationship between conditional quit rates and abilities. The second test examines the evolution of weighted average within-group ability variation. Under this model, the variation should decrease over one worker's career history due to sorting on ability. I use the NLSY79 Work-History data and find evidence of asymmetric employer learning from these tests. %I The University of Wisconsin - Madison %V 3524349 %P 113 %8 2012 %G English %9 Ph.D. %M 1080789429 %4 normal retirement age %$ 69244 %! Dynamic Models of Labor Supply and Retirement %0 Journal Article %J The American Economic Review %D 2012 %T Financial Knowledge and Financial Literacy at the Household Level %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Net Worth and Assets %K Other %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X There is evidence of a relation between numeracy and wealth held outside of pensions and Social Security. With pensions and Social Security accounting for half of wealth at retirement, and evidence that those with pensions save more in other forms, one would expect to find knowledge of pensions and Social Security influencing retirement saving. Yet we find no evidence that knowledge of pensions and Social Security is related to nonpension, non-Social Security wealth, to numeracy, or that it plays an intermediate role in the numeracy-wealth relation. Our findings raise questions about policies that would enhance numeracy to increase retirement saving. PUBLICATION ABSTRACT %B The American Economic Review %I 102 %V 102 %P 309-313 %G eng %N 3 %4 numeracy/retirement planning/social security/Wealth/public policy %$ 69526 %R 10.1257/aer.102.3.309 %0 Report %D 2012 %T Great Recession-Induced Early Claimers: Who Are They? How Much Do They Lose? %A Norma B Coe %A Matthew S. Rutledge %K Recession %K Social Security %X During the Great Recession, more older workers have claimed Social Security benefits early. This paper addresses two important policy questions: Who are these early claimers? How much retirement income have they lost as a result of claiming early? Using the Health and Retirement Study (HRS) we estimate a discrete-time hazard model that makes claiming Social Security benefits a function of age, personal characteristics, and the national unemployment rate. We project that high unemployment rates during the Great Recession led to a 5-percentage-point increase in the probability of claiming early relative to a less severe recession such as the 2001-2003 downturn, and this increase was nearly uniform across socioeconomic groups. Our estimates also suggest that while the Great Recession did impact the claiming decision, it did not cause a dramatic change in benefits. “Great Recession Claimers” – those whom we simulate were likely to claim early during the Great Recession but would not have in a milder downturn – filed for Social Security only 6 months earlier, on average, than they would have in a minor recession. This modest change in timing reduced their monthly Social Security benefit checks by $56, or 4.6 percent of average monthly benefits, and the Social Security replacement rate fell by 1.7 percentage points relative to a more typical recession. The benefit reduction resulted from the combined effect of the actuarial reduction for early claiming and the foregone opportunity to continue working and increase the wage base used for calculating benefits. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/working-papers/great-recession-induced-early-claimers-who-are-they-how-much-do-they-lose/ %0 Journal Article %J Soc Secur Bull %D 2012 %T The growth in Social Security benefits among the retirement-age population from increases in the cap on covered earnings. %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Aged %K Cohort Studies %K Female %K Humans %K Insurance Benefits %K Male %K Middle Aged %K Models, Econometric %K Public Policy %K Salaries and Fringe Benefits %K Social Security %K Taxes %K United States %X

Analysts have proposed raising the maximum level of earnings subject to the Social Security payroll tax (the "tax max") to improve long-term Social Security Trust Fund solvency. This article investigates how raising the tax max leads to the "leakage" of portions of the additional revenue into higher benefit payments. Using Health and Retirement Study data matched to Social Security earnings records, we compare historical payroll tax payments and benefit amounts for Early Boomers (born 1948-1953) with tax and benefit simulations had they been subject to the tax max (adjusted for wage growth) faced by cohorts 12 and 24 years older. We find that 43.2 percent of the additional payroll tax revenue attributable to tax max increases affecting Early Boomers relative to taxes paid by the cohort 12 years older leaked into higher benefits. For Early Boomers relative to those 24 years older, we find 53.5 percent leakage.

%B Soc Secur Bull %I 72 %V 72 %P 49-61 %8 2012 %G eng %U https://www.ssa.gov/policy/docs/ssb/v72n2/v72n2p49.html %N 2 %1 http://www.ncbi.nlm.nih.gov/pubmed/22799138?dopt=Abstract %4 Social security/payroll tax/Public policy/retirement planning/taxation %$ 69572 %0 Report %D 2012 %T How is Economic Hardship Avoided by Those Retiring Before the Social Security Entitlement Age %A Kevin Milligan %K Consumption and Savings %K Income %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Governments around the world are reacting to extended lifespans and troubled pension finances by increasing the age of retirement benefit entitlement. One concern that arises is how those who are not working before reaching entitlement age are able to bridge their consumption to the age of entitlement. This paper studies those who retire before the age of full pension entitlement in the United States using data drawn from the Health and Retirement Study. The major finding is that four out of five people who have zero earnings at pre-entitlement ages are able to find a way to lift their incomes over the poverty line. For men, pension and annuity income is important while for women, spousal income helps most to get them over the line. Reaching the early retirement entitlement age at 62 also has a significant impact on poverty avoidance. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %4 Retirement/Retirement Policies/Economics of the Elderly/Economics of the Handicapped/retirement planning/early Retirement/poverty/social Security/entitlement age %$ 69054 %R 10.3386/w18051 %0 Report %D 2012 %T Improving the Social Security Statement %A Andrew G. Biggs %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X The Social Security Statement is sent annually to each individual over age 25. The Statement contains information regarding the Social Security program, the individual's past covered earnings and contributions, and an estimate of the individual's future retirement benefits. Given the complexity of the Social Security benefit formula, the Statement represents the best and perhaps only estimate of the benefits to which an individual may be entitled. Knowledge of benefits is important, as individuals must plan their own retirement saving around their Social Security benefits. However, little research has been conducted regarding how effectively the Statement has improved Americans' knowledge of benefit levels. We here use data from the Health and Retirement Study to gauge near-retirees' ability to predict their Social Security retirement benefits both before and after the Statement began universal distribution to all near retirees in 1995. Results are ambiguous. The initial automatic distribution of the Statement did not appear to produce an immediate increase in knowledge of retirement benefit levels. However, continued receipt over a number of years prior to claiming may have reduced individual errors in predicting benefits. Financial literacy with regard to Social Security benefit levels may be improved through greater research into the contexts in which recipients understand and retain the benefit estimates contained in the Statement. %I Rochester, Social Security Administration %G eng %U http://search.proquest.com.proxy.lib.umich.edu/docview/919479167?accountid=14667http://ssrn.com/abstract=1991397 %4 retirement savings/Public policy/social security/retirement benefits/Retirement planning %$ 69544 %0 Journal Article %J Social Security Bulletin %D 2012 %T Income Replacement Ratios in the Health and Retirement Study %A Patrick, J. Purcell %K Income %K Retirement Planning and Satisfaction %K Social Security %X This article describes the income replacement ratio as a measure of retirement income adequacy and identifies several issues analysts must consider when calculating a replacement ratio. The article presents the income replacement ratios experienced by participants in the original sample cohort of the Health and Retirement Study (HRS), who were born between 1931 and 1941. Replacement ratios are shown by the respondent's birth cohort, age when first classified as retired in the HRS, and preretirement income quartile. Median replacement ratios fall as the retirement period grows longer. PUBLICATION ABSTRACT %B Social Security Bulletin %I 72 %V 72 %P 1 %G eng %N 3 %4 Social security/Retirement planning/Income replacement ratios/income %$ 69634 %0 Report %D 2012 %T The Interplay of Wealth, Retirement Decisions, Policy and Economic Shocks %A John Karl Scholz %A Ananth Seshadri %K Consumption and Savings %K Demographics %K Event History/Life Cycle %K Health Conditions and Status %K Healthcare %K Net Worth and Assets %K Retirement Planning and Satisfaction %K Social Security %X We develop a model of health investments and consumption over the life cycle where health affects longevity, provides flow utility, and retirement is endogenous. We develop a rich, numerical life-cycle model to study the complex interrelationship between health and wealth and the age of retirement. The decision to retire depends on a number of factors including earnings and health shocks, demographic characteristics, preferences, pensions, and social security. We incorporate these features in a computational model of optimal wealth and retirement decisions, solving the model household-by-household using data from the HRS. We use the model to study how workers would respond to an increase in the early eligibility age of retirement (EEA), and to what extent will the bad economy alter retirement plans. We find that increasing the EEA results in sizeable responses to the age of retirement but does not affect health outcomes very much. A 20 percent reduction in wealth induces households to delay retirement by one year, on average, with poor households being relatively unaffected. %I Ann Arbor, The University of Michigan %G eng %U http://www.mrrc.isr.umich.edu/publications/publications_download.cfm?pid=860 %4 life Cycle/health investments/Consumption/retirement planning/health Shocks/wealth/social Security/Demographic aspects %$ 69834 %0 Thesis %D 2012 %T Pensions and Household Saving in The United States %A Chang, Fei-Chien %Y Bruce, Neil %K Consumption and Savings %K Health Conditions and Status %K Net Worth and Assets %K Pensions %K Public Policy %K Social Security %X The goal of this research is to examine the effects of employer-provided pensions and Social Security on household saving in the United States. Current interest has intensified because of increasing concerns about insufficient saving for retirement, a trend in pensions from defined benefit to defined contribution plans, and a projected financial shortfall in Social Security. Specifically, the debate about whether higher pension benefits "crowd out" private saving has come under sharper focus among researchers and policymakers. If there is a full offset effect of pensions on private saving, then policies targeted to raise pension wealth may not necessarily increase overall retirement saving because households will decrease their private wealth accumulation instead. Three methodologies were employed in Chapters 2 through 4 to empirically identify the offset effects using improved data in the Health and Retirement Study (HRS). Chapter 2 presents a cross-sectional analysis in 1992. The findings show a significant but not dollar-for-dollar crowding-out effect for employer-provided defined benefit pensions and little to no offset effect for defined contribution pension and Social Security. To overcome the estimation problems such as unobserved omitted variables and insufficient variation in Social Security wealth when conducting a cross-sectional analysis, I utilize the panel structure of HRS and the recent Social Security reforms to introduce independent variation in pension wealth over time. A panel analysis using HRS data from year 1992, 1998, and 2004 is presented in Chapter 3. The panel analysis shows a statistically significant full offset effect between pensions and private saving in some specifications. Chapter 4 presents the effects of Social Security benefits withheld under the earnings test on household saving. I find evidence for a full offset effect between household saving and benefit withholding under the earnings test for those aged between 62 and normal retirement age and those with higher educational attainment. In summary, this research supports the theory that pensions crowd out private wealth accumulation. %I University of Washington %C United States -- Washington %V Ph.D. %P 98 %G English %U http://search.proquest.com.proxy.lib.umich.edu/docview/1034568586?accountid=14667 %9 3521443 %M 1034568586 %4 Saving %$ 69798 %! Pensions and Household Saving in The United States %0 Newspaper Article %B Benefits Selling. Breaking News %D 2012 %T Recession impacted near-retirees housing wealth %A Paula Aven, Gladych %K Net Worth and Assets %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Using asset and labor market data from the Health and Retirement Study, the organization examined the population that was just reaching retirement age when the recession hit, those aged 53 to 58 in 2006. %B Benefits Selling. Breaking News %I National Underwriter Company dba Summit Business Media %C New York %8 May 22, 2012 %G eng %U http://search.proquest.com.proxy.lib.umich.edu/docview/1021020587?accountid=14667 %4 great Recession/Social security/Household wealth/Retirement planning %$ 69628 %! Recession impacted near-retirees housing wealth %0 Thesis %D 2012 %T Three Essays on the Labor Supply, Savings and Investment Behavior of Older Workers %A Clift, Jack W. %Y Julie M Zissimopoulos %K Employment and Labor Force %K Healthcare %K Methodology %K Net Worth and Assets %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X In this dissertation, I provide three distinct analyses addressing labor supply, saving and investment behavior of (older) workers, in the context of the incentives and constraints they face due to employer and government policies. In the first paper, I examine labor supply flexibility and its effect on the labor supply decisions of older workers. Previous literature suggests that people would like to reduce hours of work gradually over time as they get older, but do not have the flexibility to do so in their job, and consequently may retire early rather than continue to work high hours at older ages. If greater flexibility allows individuals to stay in the labor force longer, this could increase total labor supply, helping to increase both private resources for retirement and tax revenue to support public programs. Following a sample of older Americans for 16 years from 1992 to 2008, I find that there are noticeable differences in labor outcomes between those who had flexibility over their hours in 1992 and those who were not able to adjust their hours: those with flexibility worked fewer hours in their 50s, but tended to stay in the labor force longer; the major difference between groups occurred when individuals were in their early-mid 60s, at which time those who did not have flexibility in 1992 were much more likely to retire than those with flexibility. This work provides support for the theory that people prefer gradual retirement to more abrupt departures from the labor force, and indicates that flexibility around key retirement ages might have an impact on behavior. The overall effect on total labor supply of providing flexibility at all points of the lifecycle is ambiguous. In the second paper, we examine whether labor supply flexibility affects investment behavior. Individuals can receive higher returns (on average) on their investments if they are willing to bear more risk, which allows people to reach retirement with greater resources (on average) than if they had pursued low-risk strategies; but the fear of suffering big losses discourages people from taking risks. Theoretical work has argued that individuals with flexibility over their labor supply over the lifecycle can bear more risk in their portfolio of investments, as they can increase their labor to offset any losses they might suffer. Using a new survey we fielded in the American Life Panel (ALP), we examine how different measures of labor supply flexibility are related to measures of risk-taking in investments: individual participation in the stock market, and the percentage of an individual's financial wealth held in stocks. We find no evidence that flexibility over number of hours worked per week is related to investments in stocks. We find weak evidence that other flexibility measures--an individual's belief that they would be able to continue to work longer to make up for any negative wealth shocks, and the absence of factors that make it difficult to sustain a job into old age--may be related to greater risk-taking in investments. These results may indicate that flexibility at the extensive margin (ability to extend a career) may be more relevant to investment decision-making than flexibility at the intensive margin (ability to adjust hours). In the third paper, I describe the construction and characteristics of a unique dataset with which I lay the foundations for understanding pension system incentives and how they influence work and savings behavior over the lifecycle. Public pension systems across the developed world are in need of reform, but it is important to understand how the incentives in these systems affect behavior if we are to predict the consequences of different possible reforms. Previous literature has argued that public pensions displace private savings, but with elasticity of less than 1; this suggests that possible reductions in pension benefits through reforms would be partially (but not fully) offset by increases in private saving. Using new retrospective earnings history data for five European countries, in conjunction with linked survey data describing household wealth, I construct a dataset that captures the heterogeneous pension system incentives faced, and labor supply decisions made, at each point in the lifecycle for a large group of European men. My exploratory analysis of this dataset is consistent with the hypotheses that more generous income replacement by pension plans leads to lower private wealth accumulation, and greater reward within the pension system for continued work leads to later retirement. However, these statistical associations admit of plausible alternative explanations; the work documented in this paper cannot provide definitive answers on the incentive effects of pension systems, but provides the groundwork for significant extensions of research in this field, and eventually for detailed policy simulation of pension reform. (Abstract shortened by UMI.) %I The Pardee RAND Graduate School %C Santa Monica, CA %V Ph.D. %G English %U https://www.rand.org/pubs/rgs_dissertations/RGSD305.html %M 1238001335 %4 Public policy %$ 69240 %0 Journal Article %J J Health Soc Behav %D 2011 %T Childhood health and labor market inequality over the life course. %A Steven A Haas %A M. Maria Glymour %A Lisa F Berkman %K Child %K Employment %K Female %K Health Status %K Humans %K Income %K Male %K Middle Aged %K Models, Econometric %K Retirement %K Social Class %K Social Security %K Socioeconomic factors %K United States %X

The authors use data from the Health and Retirement Study's Earnings Benefit File, which links Health and Retirement Study to Social Security Administration records, to estimate the impact of childhood health on earnings curves between the ages of 25 and 50 years. They also investigate the extent to which diminished educational attainment, earlier onset of chronic health conditions, and labor force participation mediate this relationship. Those who experience poor childhood health have substantially diminished labor market earnings over the work career. For men, earnings differentials grow larger over the early to middle career and then slow down and begin to converge as they near 50 years of age. For women, earnings differentials emerge later in the career and show no evidence of convergence. Part of the child health earnings differential is accounted for by selection into diminished educational attainment, the earlier onset of chronic disease in adulthood, and, particularly for men, labor force participation.

%B J Health Soc Behav %I 52 %V 52 %P 298-313 %8 2011 Sep %G eng %N 3 %1 http://www.ncbi.nlm.nih.gov/pubmed/21896684?dopt=Abstract %3 21896684 %4 chronic Disease/childhood health/labor Force Participation/labor market earnings/labor market earnings/earnings curves/earnings curves %$ 62704 %R 10.1177/0022146511410431 %0 Thesis %D 2011 %T Cohort Based Analysis of Income Shocks Over the Life Cycle %A Jeremy G. Moulton %K Adult children %K Employment and Labor Force %K Methodology %K Retirement Planning and Satisfaction %K Social Security %X The following three chapters investigate the first job, retirement decisions, and bequests of birth cohorts born between 1908 and 1926. I employ cohort based natural experiments using the Great Depression and Social Security Amendments of 1972 and 1977 to estimate the effect of entering the labor market during a recession, choice of retirement age in response to a retirement benefit shock, and financial transfers with children when facing a late life income shock. The first chapter uses a regression discontinuity framework to show that less educated workers entering the labor market during the Great Depression experienced 7 to 10% lower earnings roughly ten years after the onset of the Great Depression, in 1940. These effects fade substantially ten more years later in the 1950 Census. More educated workers entering the labor market experienced no loss to earnings in 1940 and positive earnings in the 1950 census, but these results may be driven by the effects of World War II or a more favorable job market for educated laborers during the Great Depression. Using the same regression discontinuity framework, I also show that young workers did not significantly delay their entry into the labor market during the Great Depression by prolonging their stay in high school. The second chapter reinvestigates and helps explain the findings of Krueger and Pischke (1992), who find no significant response of retirees in response to the Social Security Notch (Amendments of 1972 and 1977). Using a hazard model and data from the AHEAD cohort of the Health and Retirement Study, we find that using a long-term incentive measures, of the form found in Coile and Gruber (2000), provides a better estimate of retirement decision making than single year accrual measures. We find that individuals respond to both the long-term incentive measure (decreases the hazard of retiring) and the present value of their Social Security wealth (increases hazard). However, using the exogenous variation caused by the Social Security Notch results in opposite signed effects for the incentive measure. We show that this odd result and the reason that Krueger and Pischke do not find a significant change in retirement is that the Social Security Notch is one experiment, but has two offsetting, but correlated treatments. The Social Security amendments increased both the incentive measure and Social Security wealth for the cohorts subject to the 1972 amendments (Pre-Notch cohort) and the opposite for those subject to the 1977 amendments (Notch cohort). We show that the lack of retirement response is not due to no response, but to large offsetting effects. The last chapter investigates intergenerational wealth transmission between fathers and children using the 1972 and 1977 Amendments to the Social Security Act. As shown in chapter 2, individuals did not change their retirement age in response to these amendments, so those affected by the 1972 amendments experienced increased growth in Social Security benefits while those subject to the 1977 amendments experienced a negative shock (the "Notch Generation"). Using the Health and Retirement Study, I find that sons with fathers born in the Notch Generation have significantly lower wealth levels than those with fathers born in surrounding cohorts, most notably the cohort born just prior. Further evidence suggests that the wealth difference is likely due to a higher probability of providing financial support to parents and a lower probability of receiving an inheritance and financial assistance from parents. %I University of California, Davis %C Davis, CA %V Ph.D. %P 141 %G eng %4 labor market %$ 62796 %0 Journal Article %J Journal of Labor Research %D 2011 %T The Disability Screening Process and the Labor Market Behavior of Accepted and Rejected Applicants: Evidence from the Health and Retirement Study %A Seth Hyland Giertz %A Kubik, J. %K Disabilities %K Employment and Labor Force %K Social Security %X This paper uses Social Security earnings records linked to data from the Health and Retirement Study to examine the labor market behavior of rejected and accepted disability applicants prior to their application. We find that rejected applicants have substantially lower earnings and labor force participation rates during the decade prior to application than beneficiaries. Also, we find some evidence of a divergence between these groups, with rejected applicants leaving the labor force at a faster rate than beneficiaries as their application date approaches. One interpretation of these results is that the disability screening process on average separates those who are at least partially motivated by adverse economic circumstances when applying for disability benefits from other applicants. PUBLICATION ABSTRACT %B Journal of Labor Research %I 32 %V 32 %P 237-253 %G eng %N 3 %4 social security earnings and benefits/labor market behavior/labor Force Participation/disability/disability %$ 62574 %R 10.1007/s12122-011-9110-0 %0 Report %D 2011 %T Do Stronger Age Discrimination Laws Make Social Security Reforms More Effective? %A David Neumark %A Joanne Song %K Employment and Labor Force %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Supply-side Social Security reforms to increase employment and delay benefit claiming among older individuals may be frustrated by age discrimination. We test for policy complementarities between supply-side Social Security reforms and demand-side efforts to deter age discrimination, specifically studying whether stronger state-level age discrimination protections enhanced the impact of the increases in the Social Security Full Retirement Age (FRA) that occurred in the past decade. The evidence indicates that, for older individuals who were caught by the increase in the FRA, benefit claiming reductions and employment increases were sharper in states with stronger age discrimination protections. %B Michigan Retirement and Disability Research Center Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/do-stronger-age-discrimination-laws-make-social-security-reforms-more-effective-3/ %4 Public Policy/social Security/labor Force Participation/age discrimination/Delayed Retirement %$ 62661 %0 Report %D 2011 %T The Effects of Changes in Women s Labor Market Attachment on Redistribution Under the Social Security Benefit Formula %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Employment and Labor Force %K Income %K Pensions %K Social Security %K Women and Minorities %X Studies using data from the early 1990s suggested that while the progressive Social Security benefit formula succeeded in redistributing benefits from individuals with high earnings to individuals with low earnings, it was much less successful in redistributing benefits from households with high earnings to households with low earnings. Wives often earned much less than their husbands. As a result, much of the redistribution at the individual level was effectively from high earning husbands to their own lower earning wives. In addition, spouse and survivor benefits accrue disproportionately to women from high income households. Both factors mitigate redistribution at the household level. This paper compares outcomes for the earlier cohort with those of a cohort born twelve years later. With greater growth in women's earnings, the aim of the study is to see whether, after the recent growth in two earner households, and the growth in women's labor market activity and earnings, the Social Security system now fosters somewhat more redistribution from high to low earning households. We use data from the Health and Retirement Study to study a population consisting of members of households with at least one person age 51 to 56 in either 1992 or in 2004. We use four different measures of redistribution: the ratio of the present value of benefits to taxes for households arrayed by decile of covered earnings; the fraction of total Social Security benefits redistributed from households with high earnings to those with low earnings; the share of total benefits paid to members of each cohort redistributed from households falling in the highest deciles of earners to those with lower covered earnings; and the rate of return to Social Security taxes for members with different amounts of covered earnings. Considering differences in earnings between cohorts, women enjoyed a more rapid growth of labor force participation, hours of work and covered earnings than men. This increased the redistribution of Social Security benefits among households. Nevertheless, a considerable gap remains between the labor market activities and earnings of women versus men. As a result, the Social Security system remains much less successful in redistributing benefits from households with high covered earnings to those with lower covered earnings than in redistributing benefits from individuals with high covered earnings to those with lower covered earnings. %B Michigan Retirement and Disability Research Center Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://deepblue.lib.umich.edu/bitstream/handle/2027.42/86250/wp248.pdf?sequence=1 %4 social Security/benefit Formulas/Redistribution/labor Force Participation/women %$ 62644 %0 Report %D 2011 %T How Do Subjective Mortality Beliefs Affect the Value of Social Security and the Optimal Claiming Age %A Wei Sun %A Anthony Webb %K Expectations %K Health Conditions and Status %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Households that delay claiming Social Security are, in effect, making additional purchases of the Social Security annuity. Theoretical calculations show the delayed claiming is optimal, even for high mortality households. Yet most claim well before the theoretically optimal age. This paper investigates whether subjective mortality beliefs contribute to the prevalence of early claiming. The value of delay depends not only on life expectancy, but also on the degree of uncertainty surrounding the age of death. Using data from the Health and Retirement Study, we show that women approaching retirement understate their probabilities of surviving to age 75 by an average of 10 percentage points, whereas men's forecasts are, on average, correct. But both men and women exhibit greater confidence in their ability to forecast their age of death, relative to the predictions of life tables. But these subjective mortality beliefs have little effect on the value of Social Security or the optimal claim age, and cannot explain the prevalence of early claiming. We also find that self-assessed survival probabilities do not predict survival after controlling for health and socio-economic status, indicating a potential for medical underwriting to reduce adverse selection in the annuity market. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/working-papers/how-do-subjective-mortality-beliefs-affect-the-value-of-social-security-and-the-optimal-claiming-age/ %4 Mortality/social security/public policy/subjective mortality beliefs/early claiming %$ 69552 %0 Report %D 2011 %T How Does the Personal Income Tax Affect the Progressivity of OASI Benefits? %A Norma B Coe %A Karamcheva, Zhenya %A Richard W Kopcke %A Alicia H. Munnell %K Methodology %K Public Policy %K Social Security %X This study calculates the impact of federal income taxes on the progressiveness of the Old Age and Survivors Insurance (OASI) program. It uses the Health and Retirement Study (HRS) data linked with the Social Security Earnings Records to estimate OASI contributions and benefits for individuals and households, before and after income taxes, for three birth cohorts. It uses two measures of progressivity: redistribution by decile (the difference between the share of total benefits received and the share of total taxes paid) and effective progression (the change in the Gini coefficient). Under both measures, the results without the income tax confirm previous findings: Social Security is progressive on an individual basis, but that progressivity is dramatically cut when one calculates it on a household basis. Adding income taxes could make the program either more or less progressive. On the one hand, the tax treatment of contributions makes the system even less progressive than generally reported. On the other hand, the taxation of benefits makes it more progressive. The net result is that adding the personal income tax to the analysis makes Social Security more progressive than without taxes, on both the individual and household bases. Importantly, however, the impact of taxation on redistribution increases significantly among younger cohorts. Under current law, the Social Security system becomes more progressive over time. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/working-papers/how-does-the-personal-income-tax-affect-the-progressivity-of-oasi-benefits/ %4 Public policy/social security/Gini coefficient/taxation/income tax %$ 69554 %0 Report %D 2011 %T The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of their Employees onto Social Security Disability Insurance %A R.V. Burkhauser %A Lauren Hersch Nicholas %A Maximilian D. Schmeiser %K Disabilities %K Employment and Labor Force %K Public Policy %K Social Security %X The rate of application for Social Security Disability Insurance (SSDI) benefits, as well as the number of beneficiaries has been increasing for the past several decades, threatening the solvency of the SSDI program. One possible remedy is to promote continued employment amongst those experiencing the onset of a work limiting disability through the provision of workplace accommodations. Using the Health and Retirement Study data linked to Social Security administrative records and a state fixed effects model, we find that the provision of workplace accommodation reduces the probability of application for SSDI following disability onset. We estimate that receipt of an accommodation reduces a worker s probability of applying for SSDI by 30 percent over five years and 21 percent over 10 years. We then attempt to control for the potential endogeneity of accommodation receipt by exploiting exogenous variation in the implementation of state and federal anti-discrimination laws to estimate the impact of workplace accommodation on SSDI application in an instrumental variables (IV) model. While our coefficients continue to indicate that accommodation reduces SSDI application, we obtain implausibly large estimates of this effect. Overall our results imply that increasing accommodation is a plausible strategy for reducing SSDI applications and the number of beneficiaries. %B Michigan Retirement and Disability Research Center Working Paper %I The University of Michigan, Michigan Retirement Research Center %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/the-importance-of-state-anti-discrimination-laws-on-employer-accommodation-and-the-movement-of-their-employees-onto-social-security-disability-insurance-2/ %4 social Security Disability Insurance/DISABILITY/DISABILITY/workplace accommodation/workplace accommodation/Public Policy %$ 62812 %0 Report %D 2011 %T Retirement Income: Ensuring Income throughout Retirement Requires Difficult Choices %A United States Governmental Office %K Consumption and Savings %K Pensions %K Public Policy %K Social Security %X Question: The shift from defined benefit to defined contribution plans has placed more responsibility for saving for retirement on individuals shoulders. GAO considered the pros and cons of various policy options to enhance retirement income security. Finding: Using the NIA-funded Health and Retirement Study, GAO found that: (a) retirees rely primarily on Social Security and pass up opportunities for increased retirement income; (b) few retirees choose the annuity option for receipt of their defined benefit pension income; (c) elderly appear to draw down their savings gradually. Options such as encouraging annuitization and improving financial literacy so that people are aware of their investment options and associated risks were discussed as ways to bolster retirement income security. %I Washington, DC, U.S. Government Accountability Office %G eng %4 pension Plans/Public Policy/Defined benefits/defined contribution pension plans/retirement Saving/social Security %$ 62568 %0 Report %D 2010 %T Adjusting Social Security for Increasing Life Expectancy: Effects on Progressivity %A Natalia A. Zhivan %A Courtney Monk %A John A. Turner %K Life Expectancy %K Social Security %K Social Security Eligibility %X Achieving long-run Social Security solvency requires addressing rising life expectancy. Increasing the Full Retirement Age (FRA), while holding the Early Entitlement Age (EEA) fixed, could be effective but eventually will result in replacement rates that are viewed by many as too low. A possible policy to prop up replacement rates is to raise the EEA, which has been age 62 for more than 40 years. However, an increase in the EEA introduces unfairness because the variation in life expectancy across socioeconomic groups is positively correlated with lifetime income. Using data from the Health and Retirement Study to investigate how earnings relate to mortality risk and health limitations, this project explores the possibility of constructing a flexible FRA that could preserve or even enhance the progressivity of Social Security benefits. If life expectancy were correlated with lifetime income, Social Security policy could use the AIME (Average Indexed Monthly Earnings) to target policies that are more equitable for people with both lower lifetime income and lower life expectancy. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston, MA %G eng %U https://crr.bc.edu/working-papers/adjusting-social-security-for-increasing-life-expectancy-effects-on-progressivity/ %0 Journal Article %J Social Science and Medicine %D 2010 %T The association of earnings with health in middle age: Do self-reported earnings for the previous year tell the whole story? %A David Rehkopf %A Jencks, Christopher %A M. Maria Glymour %K Health Conditions and Status %K Healthcare %K Income %K Social Security %X Research on earnings and health frequently relies on self-reported earnings (SRE) for a single year, despite repeated criticism of this measure. We use 31 years (1961-1991) of earnings recorded by the United States Social Security Administration (SSA) to predict the 1992 prevalence of disability, diabetes, stroke, heart disease, cancer, depression and death by 2002 in a subset of Health and Retirement Study participants (n = 5951). We compare odds ratios (ORs) for each health outcome associated with self-reported or administratively recorded earnings. Individuals with no 1991 SSA earnings had worse health in multiple domains than those with positive earnings. However, this association diminished as the time lag between earnings and health increased, so that the absence of earnings before approximately 1975 did not predict health in 1992. Among those with positive earnings, lengthening the lag between SSA earnings and health did not significantly diminish the magnitude of the association with diabetes, heart disease, stroke, or death. Longer lags did reduce but did not eliminate the association between earnings and both disability and depression. Despite theoretical limitations of single year SRE, there were no statistically significant differences between the ORs estimated with single-year SRE and those estimated with a 31-year average of SSA earnings. For example, a one unit increase in logged SRE for 1991 predicted a 19 reduction in the odds of dying by 2002 (OR = 0.81; 95 confidence interval: 0.72,0.90), while a similar increase in average SSA earnings for 1961-1991 had an OR of 0.72 (0.6,0.82). The point estimates for the OR associated with 31 year average SSA earnings were further from the null than the ORs associated with single year SRE for heart disease, depression, and death, and closer to the null for disability, diabetes, and stroke, but none of these differences was statistically significant. %B Social Science and Medicine %I 71 %V 71 %P 431-439 %G eng %N 3 %2 PMC3345288 %4 earnings history/Income/health outcomes/depression/diabetes/Heart disease/MORTALITY %$ 23320 %R 10.1016/j.socscimed.2010.03.045 %0 Report %D 2010 %T The Effects of Health Insurance and Self-Insurance on Retirement Behavior %A John Bailey Jones %A Eric French %K Employment and Labor Force %K Medicare/Medicaid/Health Insurance %K Retirement Planning and Satisfaction %K Social Security %X This paper provides an empirical analysis of the effects of employer-provided health insurance, Medicare, and Social Security on retirement behavior. Using data from the Health and Retirement Study, we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Our results suggest that Medicare is important for understanding retirement behavior, and that uncertainty and saving are both important for understanding the labor supply responses to Medicare. Half the value placed by a typical worker on his employer-provided health insurance is the value of reduced medical expense risk. Raising the Medicare eligibility age from 65 to 67 leads individuals to work an additional 0.074 years over ages 60-69. In comparison, eliminating two years worth of Social Security benefits increases years of work by 0.076 years. %G eng %4 health Insurance/employment/medicare/social Security/retirement Planning/labor Force Participation %$ 23250 %0 Report %D 2010 %T Employment Patterns and Determinants Among Older Individuals with a History of Short-Duration Jobs %A Kevin E. Cahill %A Michael D. Giandrea %A Joseph F. Quinn %K Consumption and Savings %K Employment and Labor Force %K Net Worth and Assets %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Many studies of labor force withdrawal patterns have focused on individuals who have had career jobs. This paper compares the demographic and economic characteristics of individuals who have never had a full-time career (FTC) job with those who have, and compares the timing and types of job switches that both groups make later in life. The comparison between non-FTC and FTC individuals is important because decisions by policymakers based on the existing retirement literature may have unintended consequences for individuals with only a series of short-duration jobs. We use a sample of respondents from the Health and Retirement Study (HRS) who have worked since age 50, and stratify respondents according to whether an individual has ever had a job that consists of 1,600 or more hours per year and lasts for at least ten years (i.e., a full-time career job). We find that individuals without FTC jobs are a heterogeneous group, representing individuals in many wage and occupational categories. Not surprisingly, we also find that individuals without FTC jobs are less likely than those with FTC jobs to be working in subsequent survey years. However, we find that the labor force withdrawal patterns of non-FTC individuals are similar to those of FTC individuals in many respects. In particular, individuals without FTC jobs change jobs later in life just as frequently as those with FTC jobs. Switching rates between wage-and-salary employment to self-employment and between white-collar and blue-collar jobs are largely similar by FTC status, as are reductions in wages later in life. Overall, the findings reveal that the work decisions later in life of individuals who have never had career employment are diverse, just as they are for individuals with career jobs. %B U.S. Bureau of Labor Statistics, Working Papers %I U.S. Bureau of Labor Statistics %C Washington, D.C. %V 440 %G eng %U https://www.bls.gov/osmr/research-papers/2010/ec100080.htm %N 33 %4 Retirement, Retirement Policies/Economics of the Elderly/Economics of the Handicapped/Non-labor Market Discrimination/Nonwage Labor Costs and Benefits/Private Pensions/Social Security/Public Pensions/Economics of Aging/Bridge Jobs/Gradual Retirement %$ 23940 %0 Thesis %D 2010 %T Extending the working lives of older workers: The impact of Social Security policies and labor market %A Xiaoyan Li %Y Nicole Maestas %K Employment and Labor Force %K Retirement Planning and Satisfaction %K Social Security %X This dissertation addresses several issues related to public policies that encourage the extension of working lives of the elderly in the United States. It consists of three chapters. The first chapter and the second chapter of the dissertation evaluate the impacts of the increase in the Social Security Full Retirement Age (FRA) from age 65 (for those born before 1937) to age 66 (for those born between 1943 and 1954). As the FRA rises, the relative generosity of Social Security disability benefits in comparison to retirement benefits is rising, increasing the incentive for insured people to apply for disability benefits. The first chapter uses the Health and Retirement Study (HRS) to estimate this spillover effect. I find that an average four-month increase in the FRA modestly increases the two-year disability benefits application rate by 0.34 percentage points. The effect is greater (0.77 percentage points) among those with a work-limiting health problem. The increase in the FRA also creates an incentive for older workers to increase their labor supply. Using the Basic Monthly Current Population Survey 1994-2009, the second chapter estimates that the labor force participation rate of men aged 62-65 increased by 3.5-4.5 percentage points in response to a one-year increase in the FRA. The third chapter of the dissertation answers the question, "To what extent can the elderly readily find suitable jobs if they want or need to work?" This chapter shows that the employment transition rates are relatively low for older job searchers in the Health and Retirement Study: only half of older searchers successfully attain jobs. A negative age gradient in job attainment is estimated from a set of reduced-form econometric models, which although not conclusive, corroborates other evidence in the literature of statistical age discrimination in the labor market for older workers. %I The Pardee RAND Graduate School %V PhD %P 135 %G eng %4 Retirement age %$ 23560 %! Extending the working lives of older workers: The impact of Social Security policies and labor market %0 Book Section %B Social Security Programs and Retirement around the World %D 2010 %T Fiscal Effects of Social Security Reform in the United States %A Courtney Coile %A Gruber, Jonathan %E Gruber, Jonathan %E David A Wise %K Other %K Public Policy %K Social Security %B Social Security Programs and Retirement around the World %S A National Bureau of Economic Research conference report %I University of Chicago Press %C Chicago %P 503-531 %G eng %4 social security/OASDI/earnings and Benefits File/actuarial reform/common reform/social security wealth %$ 24200 %! Fiscal Effects of Social Security Reform in the United States %& 12 %0 Report %D 2010 %T The Growth in Social Security Benefits Among the Retirement Age Population from Increases in the Cap on Covered Earnings %A Alan L Gustman %A Thomas L. Steinmeier %A Tabatabai, Nahid %K Demographics %K Public Policy %K Social Security %X This paper investigates how increases in the level of maximum earnings subject to the Social Security payroll tax have affected Social Security benefits and taxes. The analysis uses data from the Health and Retirement Study to ask how different the present value of own benefits and taxes would be for the cohort born from 1948 to 1953 (ages 51 to 56 in 2004) if they faced the lower cap on the payroll tax that faced those born 12 and 24 years earlier, but otherwise had the same earnings stream and faced the same benefit formula. We find that for those in the Early Boomer cohort of the Health and Retirement Study, ages 51 to 56 in 2004, that after adjusting for nominal wage growth, benefits were increased by 1.5 percent by the increase in the payroll tax ceiling compared to the cohort 12 years older, and by 3.7 percent over the benefits under the payroll tax ceiling for the cohort 24 years older. Tax receipts were increased by 5.3 and 10.6 percent over tax receipts that would have been collected under the tax ceilings that applied to the cohorts 12 and 24 years older respectively. About 22 percent of the additional tax revenues created by the increase in the payroll tax cap between the Early Boomer cohort and those 12 years older led to increased benefits. Similarly, about 27 percent of the additional tax revenues created by the increase in the payroll tax cap between the Early Boomer cohort and those 24 years older led to increase benefits. Results are also presented separately for men and women, for those in the top quartile of earners, and for those at the tax ceiling throughout their work lives. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %4 social Security/early boomers/earnings and Benefits File/Public Policy/payroll tax/tax revenues %$ 24370 %R 10.3386/w16501 %0 Report %D 2010 %T Participation and Contributions in Tax-deferred Retirement Accounts: Evidence from Social Security Records %A Honig, Marjorie %A Irena Dushi %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Social Security Administration W-2 records contain employee annual tax-deferred contributions for 1990-2003 and sufficient information to calculate tax-deferred contributions for 1984-1989. We use this information to compare tax-deferred contribution profiles of three cohorts of respondents in the Health and Retirement Study to determine whether younger cohorts saved relatively more at the same stage of the life cycle than had older cohorts. We find that participation in tax-deferred retirement plans increased substantially for all cohorts from 1984 to 2003, and that respondents in more recent cohorts were more likely to participate in such plans than respondents of the same ages in the earliest cohort. Their contributions as a percent of earnings were not significantly larger than those of the earliest cohort, however. Despite the increased availability of these employer-provided plans throughout this period, participation rates and contribution amounts remained low among respondents in the lower half of the earnings distribution. %B Workin %I University of Michigan Retirement and Disability Research Center %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/participation-and-contributions-in-tax-deferred-retirement-accounts-evidence-from-social-security-records/ %4 earnings and Benefits File/tax-def/erred contributions/pensions/retirement planning %$ 24400 %0 Report %D 2010 %T Personality, Lifetime Earnings, and Retirement Wealth %A Angela Lee Duckworth %A David R Weir %A Michigan Retirement Research Center %K Health Conditions and Status %K Healthcare %K Public Policy %K Social Security %X Studies of adolescents and young adults have shown that schooling impacts economic outcomes beyond its impact on cognitive ability. Research has also shown that the personality trait of conscientiousness predicts health outcomes, academic outcomes, and divorce. Using the Big Five taxonomy of personality traits, this study examines whether non-cognitive traits are related to economic success over the life course. Examining Health and Retirement Study survey data linked to Social Security records on over 10,000 adults age 50 and over, we investigate the relationship of personality traits to economic outcomes. Controlling for cognitive ability and background variables, do more conscientious and emotionally stable adults have higher lifetime earnings, and is this due to higher annual earnings, longer work lives, or both? Do more conscientious adults save a higher proportion of their earnings for retirement, and does conscientiousness of each partner in a married couple matter? Do conscientiousness and emotional stability interact such that the effects of conscientiousness are greater among less emotionally stable adults? %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://ideas.repec.org/p/mrr/papers/wp235.html %4 health outcomes/cognitive ability/economic outcomes/earnings and Benefits File %$ 24340 %0 Report %D 2010 %T Protecting the Household Incomes of Older Workers with Significant Health-Related Work Limitations in an Era of Fiscal Responsibility %A Jody Schimmel %A David Stapleton %K Employment and Labor Force %K Medicare/Medicaid/Health Insurance %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Many proposals designed to reduce federal budget deficits include retirement policy reforms that would delay workers access to retirement benefits or reduce the value of benefits to those who retire early. Such reforms would have adverse consequences for the economic well-being of older workers with health-related work limitations. In this paper, we explore a set of policy options that take a work-support approach-an earned income tax credit (EITC), an employment services allowance, and a health insurance subsidydesigned to encourage and help workers continue to work if they can. To arrive at a population that might be eligible for such benefits, we first develop a straightforward model to predict the likelihood that a worker reporting a health-related work limitation would experience economic hardship as a result. The model bounds the target population by excluding those who are not expected to experience financial hardship from earnings loss due to a health-related work limitation. It also demonstrates an approach to eligibility determination that would discourage gaming and support rapid eligibility determination-critical for a program designed to extend employment and prevent financial hardship. Using conservative assumptions about program costs, our most expensive program would have a per capita cost of 14,600, or 11,300 if the health insurance subsidy is viewed as an ACA cost. This can be compared to estimated mean annual benefits of 14,855 in 2009 for Social Security Disability Insurance (SSDI) beneficiaries age 50 and older, plus 11,000 per year for Medicare after the 24-month waiting period. Because of its more favorable work incentives, a work-support program is likely to reduce hardship more than a program that preserves existing benefits for the same workers at comparable cost and is likely to be no more difficult to administer. %B Michigan Retirement Research Center Working Paper %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://ideas.repec.org/p/mrr/papers/wp244.html %4 Public Policy/retirement benefits/labor force participation/social Security Disability Insurance/retirement Policies/Medicare %$ 26130 %0 Report %D 2010 %T The Role of Re-entry in the Retirement Process %A Michael D. Giandrea %A Kevin E. Cahill %A Joseph F. Quinn %K Consumption and Savings %K Employment and Labor Force %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X To what extent do older Americans re-enter the labor force after an initial exit and what drives these unretirement decisions? Retirement for most older Americans with full-time career jobs is not a one-time, permanent event. Labor force exit is more likely to be a process. Prior studies have found that between one half and two thirds of career workers take at least one other job before exiting from the labor force completely. The transitional nature of retirement may be even more pronounced when considering the impact of re-entry. This paper examines the extent to which older Americans with career jobs re-entered the labor force. The analysis is based on data from the Health and Retirement Study (HRS), an ongoing, longitudinal survey of older Americans that began in 1992. We examined the retirement patterns of a subset of 5,617 HRS respondents who were on a full-time career job at the time of the first interview. Logistic regression was used to explore determinants of re-entry among those who initially exited the labor force. We found that approximately 15 percent of older Americans with career jobs returned to the labor force after initially exiting. Respondents were more likely to re-enter if they were younger, were in better health, or had a defined-contribution pension plan. This research provides empirical evidence of how older Americans are utilizing bridge jobs as they transition from career employment, and that re-entry may be an important part of the work experience of older Americans. %B Working Paper %I U.S. Bureau of Labor Statistics %C Washington, D.C. %G eng %U https://www.bls.gov/osmr/research-papers/2010/pdf/ec100070.pdf %4 Retirement, Retirement Policies/Economics of the Elderly/Economics of the Handicapped/Non-labor Market Discrimination/Private Pensions/Social Security and Public Pensions/Economics of Aging/Partial Retirement/Bridge Jobs/Gradual Retirement %$ 23200 %0 Thesis %D 2010 %T Social security claiming of the elderly in the United States %A Peng, Yu-I %Y Bruce, Neil %K Employment and Labor Force %K Health Conditions and Status %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This dissertation comprehensively studies the behavior of Social Security retirement benefit claiming of the elderly in the United States, using data from the 1992-2006 Health and Retirement Study (HRS) and the supplement "Prospective Social Security Wealth Measures of Pre-retirees". This dissertation begins by modeling the claiming behavior of Social Security retirement beneficiaries under a framework incorporating the incentives for married couples. For individuals who retire by age 62 (the earliest entitlement age), the results indicate that the expected amount of benefit is a strong predictor for the timing of claiming. However, life expectancy, consistent with previous studies, is not a critical determinant of the claiming decision alone, even after taking into account the dependent spouse's longevity expectation. The second chapter models the claiming behavior among individuals who have not retired by age 62 jointly with their retirement behavior. The results show a high correlation between the two decisions. By breaking down the sample, it is found that claiming is attached to retirement; after withdrawal from the labor force and with no labor income, retirees would rely on the Social Security benefits, and liquidity holding becomes a major factor explaining how soon retirees claim their benefits. However, for late-retiring workers, the Social Security retirement benefits do not give much retirement incentive. The third chapter of this dissertation brings in one of the most important Social Security mechanisms, the Social Security earnings test, and takes advantage of its recent reform, the abolishment of the test above the Normal Retirement Age (NRA) in year 2000, to analyze the role of the earnings test in the decisions of claiming and retirement. The earnings test is found to be a crucial factor that links the dates of them. %I University of Washington %V PhD %P 124 %G eng %9 Dissertation %4 Longevity %$ 24050 %! Social security claiming of the elderly in the United States %0 Report %D 2010 %T The Social Security Early Retirement Benefit as Safety Net %A John Bound %A Timothy A Waidmann %A Michigan Retirement Research Center %K Demographics %K Disabilities %K Retirement Planning and Satisfaction %K Social Security %X In this paper we used the Health and Retirement Study to examine the health and economic status of those who collect Social Security retirement benefits prior to the full retirement age. We used a propensity score reweighting method to estimate the fraction of early retirees who uses early retirement benefits as a safety net against deteriorating health and who might be induced to apply for disability benefits (SSDI) or retire without income replacement if the generosity or availability of early retirement benefits were reduced. We find that while the majority of early retirees would likely not qualify for disability benefits, approximately one in five have health characteristics similar to SSDI beneficiaries, and thus might not be able to replace losses in benefit income with labor income. %I The University of Michigan, Michigan Retirement Research Center %G eng %4 socioeconomic Status/retirement benefits/disability benefits/early Retirement/earnings and Benefits File %$ 24300 %0 Thesis %D 2010 %T SSI eligibility and participation among the aged: A hazard model approach %A Jin H. Kim %Y Meyer, Dan %K Demographics %K Expectations %K Methodology %K Other %K Social Security %X This dissertation revisits the historic policy concern over nonparticipation in the Supplemental Security Income (SSI) program, and more specifically, the question of why take- up of SSI program benefits among the aged is perpetually lower than what theory proposes. The most contemporary research model suggests that from a static or cross-sectional perspective, the aged take-up decision is primarily determined by the financial situation of the eligible individuals (McGarry, 1995). Yet, extant studies have yet to establish a dynamic model of SSI participation that explicitly takes into account the changing circumstances of the elderly. For many elders, the period after age 65 is a time of rapid and considerable changes in the areas of income, health and functioning, as well as living situations. As such, this study extends the current literature by exploring the longitudinal processes leading to both SSI eligibility and eventual take-up of benefits among the aged. Methodologically, the research relies on event history analysis of data from the Health and Retirement Study spanning the years 1996-2006 to explain both the timing of transition to eligibility and participation status, as well as the role of life events on the aforementioned outcomes of interest. Life table analysis yields a cumulative, twelve-year take-up rate of ∼36% among those eligible, and a cumulative, twelve-year eligibility rate of ∼25% among those at risk. Meanwhile, hazard models reveal that changes in health and functioning over time in addition to changes in the expected benefit significantly influence the participation decision. %I The University of Wisconsin - Madison %C Madison, WI %V Doctor of Philosophy %G eng %9 Dissertation %L newpubs20110418_Kim2.pdf %4 Elderly %$ 24940 %0 Report %D 2010 %T Trigger Events and Financial Outcomes Among Older Households %A Geoffrey L Wallace %A Haveman, Robert %A Karen C. Holden %A Barbara Wolfe %K Adult children %K Health Conditions and Status %K Healthcare %K Net Worth and Assets %K Social Security %X Follow a sample of social security beneficiaries drawn from the Health and Retirement Study from their first year of retirement up to 15 years into retirement, we estimate rates at which retirees are subject to family structure change, cognitive decline, health decline, and other events. Then we assess the vulnerability of wealth and wealth-based adequacy measures to adverse events, drawing conclusions about the effect of events on a wealth-based measure and a wealth-based inadequacy measure. Our findings highlight the importance of cognitive and health decline as events with the potential to shape the evolution of wealth post-retirement. %B Center for Financial Security Working Paper %I Center for Financial Security, University of Wisconsin-Madison %C Madison, WI %G eng %U https://cfs.wisc.edu/2010/09/10/trigger-events-and-financial-outcomes-among-older-households/ %4 social Security/wealth/adverse events/adverse events/Cognitive decline/health decline/Families %$ 26170 %0 Thesis %D 2010 %T Women's alternative retirement transition options: Social Security retirement benefits and employment status %A Gillen, Martie %K Adult children %K Employment and Labor Force %K Healthcare %K Net Worth and Assets %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X The purpose of this dissertation is to examine two common measures of retirement status: (1) receipt of Social Security retirement benefits and (2) employment status. A three manuscript format was used to report the effects of human capital characteristics (education, marital status, and health status), types of income sources (pension income, IRA/annuity income, investment asset income, and other income), and age on women's timing of Social Security retirement benefit receipt and employment status. Four waves of Health and Retirement Study (FIRS) data (2000, 2002, 2004, and 2006) were used in the analyses. Manuscript 1 used longitudinal data to investigate alternative retirement options based on timing of Social Security benefit receipt and employment status. A majority of women chose early receipt of benefits compared to normal or delayed receipt. A greater percentage of women who did not receive Social Security benefits were employed compared to those who received benefits. Among women employed full-time; a large percentage did not receive Social Security benefits while a large percentage of women employed part-time received benefits. Manuscript 2 used cross-sectional data to focus on timing of receipt of Social Security retirement benefits. Less than excellent health and receiving pension income increased the likelihood of early receipt. Not being married and receiving income from earnings and unspecified income sources reduced the likelihood of early receipt. Manuscript 3 used cross-sectional data to estimate the likelihood of being employed. Having more years of education and being divorced/separated increased the likelihood; while poor/fair health, older age, receipt of Social Security benefits, and pension income reduced the likelihood of being employed. Additionally, manuscript 3 estimated the likelihood of full and part-time employment for women receiving Social Security benefits. Overall, this dissertation updates current knowledge regarding the complex options of timing of receipt of Social Security retirement benefits and employment options. %I University of Kentucky %C United States -- Kentucky %V Ph.D. %P 174 %G eng %U http://proquest.umi.com.proxy.lib.umich.edu/pqdweb?did=2575907951&Fmt=7&clientId=17822&RQT=309&VName=PQD %9 3492801 %4 Human Capital %$ 62862 %! Women's alternative retirement transition options: Social Security retirement benefits and employment status %0 Report %D 2010 %T Work Ability and the Social Insurance Safety Net in the Years Prior to Retirement %A Richard W. Johnson %A Melissa Favreault %A Corina D Mommaerts %K Disabilities %K Employment and Labor Force %K Public Policy %K Social Security %X A patchwork of public programs primarily Social Security Disability Insurance, workers compensation, Supplemental Security Income, and veterans benefits provides income supports to people who are unable to work. Yet, questions persist about the effectiveness of these programs. This report examines the economic consequences of disability in the years leading to retirement. Using data from the Health and Retirement Study, the analysis follows a sample of Americans age 51 to 55 in 1992 and computes their disability status, disability benefit receipt, and income until age 64, just before they qualify for full Social Security retirement benefits. The results underscore the precarious financial state of most people approaching traditional retirement age with disabilities. Fewer than half of people who meet our disability criteria ever receive disability benefits in their fifties or early sixties. Poverty rates for those who do are more than three times as high after benefit receipt than before disability onset. %I The Urban Institute %G eng %U http://www.urban.org/UploadedPDF/412008_work_ability.pdf?RSSFeed=UI_RetirementandOlderAmericans.xml %4 social Security Disability Insurance/Public Policy/DISABILITY/DISABILITY/workers compensation/workers compensation/Supplemental Security Income/labor Force Participation %$ 25960 %0 Book Section %B Research Findings in the Economics of Aging %D 2010 %T Work Disability: The Effects of Demography, Health, and Disability Insurance %A Axel Borsch-Supan %E David A Wise %K Cross-National %K Disabilities %K Employment and Labor Force %K Social Security %B Research Findings in the Economics of Aging %S National Bureau of Economic Research conference report %I University of Chicago Press %C Chicago %P 37-58 %G eng %4 disability insurance/workforce/social Security/cross-national comparison %$ 24130 %! Work Disability: The Effects of Demography, Health, and Disability Insurance %& 2 %0 Report %D 2009 %T Cross-Wave Prospective Social Security Wealth Measures of Pre-Retirees, Public Release: Data Description and Usage %A Kandice Kapinos %A Charles Brown %A Michael A. Nolte %A Helena Stolyarova %A David R Weir %K Net Worth and Assets %K Social Security %X The Prospective Social Security Wealth Measures of Pre-Retirees data set consists of respondent-level, cross-sectional files constructed from the employment sections of the HRS 1992 (wave 1), HRS 1998 (wave 4), HRS 2004 (wave 7) and the restricted SSA summary and detailed earnings and benefits files. In this public use file, we calculate wealth only for individuals who have not yet retired (as evidenced by claiming SS benefits) (see Section III.C). Each individual is uniquely identified by the concatenation of the household ID and the person number, HHID and PN. We organize the data to match the organization of the RAND HRS data files. %I Institute for Social Research, University of Michigan %C Ann Arbor, Michigan %G eng %4 social Security/wealth %$ 62780 %0 Journal Article %J J Gerontol B Psychol Sci Soc Sci %D 2009 %T The effect of retirement on weight. %A Chung, Sukyung %A Marisa E Domino %A Sally C. Stearns %K Aged %K Aging %K Body Mass Index %K Cohort Studies %K Cross-Sectional Studies %K Female %K Geriatric Assessment %K Health Status %K Humans %K Longitudinal Studies %K Male %K Middle Aged %K Models, Statistical %K Motor Activity %K Obesity %K Overweight %K Pensions %K Retirement %K Social Security %K Socioeconomic factors %K United States %K Weight Gain %X

OBJECTIVES: People who are close to retirement age show the highest rates of weight gain and obesity. We investigate the effect of retirement on the change in body mass index (BMI) in diverse groups varying by wealth status and occupation type.

METHODS: Six panels of the Health and Retirement Study (1992-2002) on individuals aged 50-71 were used (N = 37,807). We used fixed-effects regression models with instrumental variables method to estimate the causal effect of retirement on change in the BMI.

RESULTS: Retirement leads to modest weight gain, 0.24 BMI on average. Weight gain with retirement was found among people who were already overweight and those with lower wealth retiring from physically demanding occupations. The cumulative effect of aging among people in their 50s, however, outweighs the effect of retirement; the average BMI gain between ages 50 and 60 is 1.30, 5 times the effect of retirement.

CONCLUSIONS: Given the increasing number of people approaching retirement age, the population level impact of the weight gain ascribed to retirement on health outcomes and health care system might be significant. Future research should evaluate programs targeted to older adults who are most likely to gain weight with retirement.

%B J Gerontol B Psychol Sci Soc Sci %I 64B %V 64 %P 656-65 %8 2009 Sep %G eng %N 5 %L newpubs20090908_ChungJoG.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/19357073?dopt=Abstract %3 19357073 %4 RETIREMENT/Obesity/Body Mass Index/Occupations/Wealth %$ 20850 %R 10.1093/geronb/gbn044 %0 Journal Article %J Research on Aging %D 2009 %T How Changes in Social Security Affect Retirement Trends %A Alan L Gustman %A Thomas L. Steinmeier %K Employment and Labor Force %K Retirement Planning and Satisfaction %K Social Security %X For married men, we find the conventional view of retirement trends that the long term trend to early retirement has been reversed -- is partially contradicted by recent data. Specifically, descriptive data collected from both the Census and the Health and Retirement Study (HRS) suggest that for those in their fifties, over the periods 1992 to 1998 and 1998 to 2004, the trend to early retirement reasserted itself and labor force participation fell. In contrast, for those in their sixties, there was an increase in work. Similarly, for those 65 and over, the amount of work increased. Simulations with a structural retirement model suggest that the recent acceleration of the trend to early retirement for those in their fifties is not the result of the change in Social Security rules. According to our model, changes in Social Security rules are expected to reduce the number of those in their early sixties who are working. This suggests that forces other than changing Social Security rules account for the observed increase in work by those in their early sixties, and that the effects of these forces are stronger than those suggested by the trends in descriptive data. Lastly, the analysis suggests that changing Social Security rules do help to explain the increase in work by those age 65 and older. The effects of these rule changes encourage workers to remain in their long term jobs for a longer time, encourage some to return from retirement to full time work, and encourage more partial retirement. Nevertheless, the changes in retirement induced by Social Security changes have been modest. Due to Social Security changes, the number of 65 year old married men at work increases by about two percentage points at ages 65 and 66, with slightly smaller changes at 67 to 69. Given the low basic labor force participation at 65 and 66, with 20 to 25 percent at full time work, and another 17 percent at part time work, the percentage increases in work due to Social Security changes are three or four times higher. %B Research on Aging %I 31 %V 31 %P 261 %G eng %N 2 %L newpubs20070125_MRRCwp127 %4 Retirement Behavior/Labor Force Participation/Social Security %$ 17180 %R https://doi.org/10.1177/0164027508328312 %0 Journal Article %J Journal of Financial Transformation %D 2009 %T Hypothetical versus Actual Earnings Profiles: Implications for Social Security Reform %A Olivia S. Mitchell %A John W R Phillips %K Income %K Older Adults %K Social Security %B Journal of Financial Transformation %V 24 %P 102-04 %G eng %0 Journal Article %J Journal of Disability Policy Studies %D 2009 %T Income Security for Workers %A David Stapleton %A R.V. Burkhauser %A Peiyun She %A Robert R. Weathers II %A Livermore, Gina A. %K Employment and Labor Force %K Insurance %K Other %K Social Security %X The current mix of public and private programs to support workers after they experience disability onset provides benefits to millions of workers and former workers. Yet, despite the large and growing costs of these programs, the inflation-adjusted household incomes of workers with disabilities have been falling for more than two decades, both absolutely and, especially, relative to the incomes of those without disabilities. The aging of the baby boom generation is likely to make matters worse, and the government's fiscal circumstance will make it increasingly difficult to sustain existing public programs. Current public policy initiatives might eventually improve the disability support system, but they are not likely to ward off the adverse consequences of the pending crisis. Policy changes that leverage existing private sector practices and capabilities might achieve greater success but have received little attention and are far from proven. %B Journal of Disability Policy Studies %I 19 %V 19 %P 204-220 %G eng %N 4 %4 insurance/security/Social Security/employment %$ 25380 %R 10.1177/1044207308314949 %0 Book Section %B Social Security Policy in a Changing Environment %D 2009 %T Reducing Social Security PRA Risk at the Individual Level: Life-Cycle Funds and No-Loss Strategies %A James M. Poterba %A Joshua Rauh %A Steven F Venti %A David A Wise %K Social Security %X Retirement savers in a Social Security system with a personal retirement account (PRA) component would face the challenge of deciding how to allocate their PRA portfolios across a broad range of asset classes and across many different financial products. Asset allocation decisions have important consequences for retirement wealth accumulation because they affect the expenses of investing as well as the risk of low returns. The goal of this chapter is to assess the relative risk associated with alternative asset allocation strategies in PRAs. It also offers insight on the consequences of different asset allocation rules in current private-sector defined contribution (DC) plans, such as 401(k) plans. Quantifying the risk associated with %B Social Security Policy in a Changing Environment %I University of Chicago Press %P 255-292 %G eng %U http://www.nber.org/chapters/c4543 %0 Journal Article %J Journal of Pension Economics and Finance %D 2009 %T The Repeal of the Retirement Earnings Test and the Labor Supply of Older Men %A Gary V. Engelhardt %A Kumar, Anil %K Demographics %K Employment and Labor Force %K Social Security %X This paper examines the impact of the Senior Citizens Freedom to Work Act of 2000, which abolished the Social Security retirement earnings test for those aged 65-69, on the labor supply of older men using data from the 1996-2004 waves of the Health and Retirement Study (HRS). Based on reduced-form specifications, we find that the repeal of the earnings test increased labor supply on the intensive margin by 12-17 , the bulk of which was concentrated among men with a high-school degree, whose labor supply rose by 19-26 . We formulate a unique test for endogenous reporting of health status by examining how reported health changes with the repeal of the earnings test. We find some evidence of endogenous self-reported health status. In particular, older men were substantially less likely to have reported that health limits their ability to work after, relative to before the earnings test repeal, with the bulk of the effect concentrated among men with high-school degrees, who had the largest labor-supply response to the repeal. %B Journal of Pension Economics and Finance %I 8 %V 8 %P 429-450 %G eng %N 4 %L newpubs20091202_wp_2007-1.pdf %4 Social Security/Older men/Labor Supply %$ 21400 %R https://doi.org/10.1017/S1474747208003892[Opens in a new window] %0 Report %D 2009 %T Retirement Wealth Across Cohorts: The Role of Earnings Inequality %A Ann H. Stevens %K Demographics %K Employment and Labor Force %K Net Worth and Assets %K Public Policy %K Social Security %X Changes in labor markets over the past 30 years suggest upcoming changes in the distribution of wealth at retirement. Workers from the baby boom cohort have spent the majority of their working years in a labor market with substantially higher earnings inequality than previous generations. This paper investigates how changes in lifetime earnings distributions affect the distribution of retirement wealth among cohorts retiring over the next decade. I use data from the Health and Retirement Study from 1992 to 2004 to estimate the relationship between lifetime earnings, pre-retirement private wealth and Social Security wealth. I show that changes in the lower half of the male earnings distribution explain a substantial portion of changes in the distribution of pre-retirement wealth. When pensions are added to the measure of wealth, the role of earnings is even larger, reflecting a strong correlation between changes in earnings across these cohorts and changes in the values of their employer-provided pensions. The present value of wealth from future Social Security benefits, in contrast, grows in real terms throughout most of the distribution. At the bottom of the male distribution of Social Security wealth, reductions in lifetime earnings limit this growth in real benefits, while at the top of the distribution earnings growth amplifies expected growth in Social Security wealth. %B Michigan Retirement and Disability Research Center Working Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/retirement-wealth-across-cohorts-the-role-of-earnings-inequality-and-pension-changes/ %4 early boomers/labor Market/lifetime earnings/lifetime earnings/wealth/Social Security/public Policy %$ 26150 %0 Journal Article %J Social Security Bulletin %D 2009 %T Social Security Research at the Michigan Retirement Research Center %A R.V. Burkhauser %A Alan L Gustman %A John Laitner %A Olivia S. Mitchell %A Amanda Sonnega %K Meta-analyses %K Older Adults %K Research %K Social Security %X Social Security has been a topic of widespread discussion in the last decade. Rising longevity and falling fertility have led to an aging population, which increases solvency challenges for the Social Security system. Public concerns over low national saving have led to an extensive dialog on the merits of reform that might change the U.S. system into one with fully or partially funded personal accounts. Meanwhile, pensions in the private sector have been evolving from predominantly defined benefit (DB) to predominantly defined contribution (DC), raising concerns that workers preparing for retirement have more personal responsibility, with more complex financial challenges, than ever before. %B Social Security Bulletin %V 69 %P 51-64 %G eng %U https://www.ssa.gov/policy/docs/ssb/v69n4/v69n4p51.pdf %N 4 %& 51 %0 Journal Article %J Social Security Bulletin %D 2009 %T Social Security Research at the Michigan Retirement Research Center %A R.V. Burkhauser %A Alan L Gustman %A John Laitner %A Olivia S. Mitchell %A Amanda Sonnega %K Pension %K Retirement %K Social Security %X Social Security has been a topic of widespread discussion in the last decade. Rising longevity and falling fertility have led to an aging population, which increases solvency challenges for the Social Security system. Public concerns over low national saving have led to an extensive dialog on the merits of reform that might change the U.S. system into one with fully or partially funded personal accounts. Meanwhile, pensions in the private sector have been evolving from predominantly defined benefit (DB) to predominantly defined contribution (DC), raising concerns that workers preparing for retirement have more personal responsibility, with more complex financial challenges, than ever before. %B Social Security Bulletin %V 69 %G eng %U https://www.ssa.gov/policy/docs/ssb/v69n4/v69n4p51.html %N 4 %9 Journal %0 Report %D 2009 %T Strange But True: Claim and Suspend Social Security %A Alicia H. Munnell %A Golub-Sass, Alex %A Nadia S. Karamcheva %K Retirement Planning and Satisfaction %K Social Security %X The brief’s key findings are: During the current economic crisis, many older workers are postponing retirement and some retirees are re-entering the labor force. Re-entrants age 66 and over can put their Social Security benefits “on hold” in exchange for higher benefits later. This “claim and suspend” strategy also offers greater flexibility to one-earner couples, allowing the higher earner to delay benefits while his spouse claims. The potential costs to Social Security are modest. %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/briefs/strange-but-true-claim-and-suspend-social-security/ %4 social Security/retirement planning %$ 26050 %0 Report %D 2009 %T Strange But True: Claim Social Security Now, Claim More Later %A Alicia H. Munnell %A Golub-Sass, Alex %A Nadia S. Karamcheva %K Retirement Planning and Satisfaction %K Social Security %I Center for Retirement Research at Boston College %G eng %U http://www.advicenter.com/AgentUploads/2124608992/ClaimSSNowClaimMoreSSLater-BostonCollegeStudy.pdf %4 social Security/retirement planning %$ 26070 %0 Report %D 2009 %T Strange But True: Free Loan from Social Security %A Alicia H. Munnell %A Golub-Sass, Alex %A Nadia S. Karamcheva %K Retirement Planning and Satisfaction %K Social Security %I Center for Retirement Research at Boston College %G eng %U http://www.investmentnews.com/assets/docs/CI6088349.PDF %4 social Security/retirement planning %$ 26060 %0 Report %D 2009 %T Unusual Social Security Claiming Strategies: Costs and Distributional Effects %A Alicia H. Munnell %A Sass, Steven A. %A Golub-Sass, Alex %A Nadia S. Karamcheva %K Social Security %X When to claim Social Security is one of the most important decisions Americans face when approaching retirement. Recently, several unconventional claiming strategies have come to light – “Free Loan,” “Claim and Suspend,” and “Claim Now, Claim More Later” – that have the potential to pay higher lifetime benefits to some individuals, increasing system costs. In the “Free Loan” strategy, an individual can claim benefits at a given age and later repay them and file again, obtaining an increased benefit from the delayed filing. This strategy is equivalent to a “no interest” loan from Social Security and could potentially cost the program as much as $11 billion a year. “Claim and Suspend” allows an individual to claim benefits and then immediately suspend them, either to put his own benefits on hold if he reenters the workforce or to allow his spouse to claim a spousal benefit while he continues to work and earn delayed retirement credits. The potential cost of allowing couples the option of “Claim and Suspend” is about $0.5 billion dollars a year. In the “Claim Now, Claim More Later” strategy, a married individual claims a spousal benefit while delaying claiming his own retired worker benefit in order to build up delayed retirement credits. This option could potentially cost Social Security $10 billion a year. Of the three strategies, “Claim and Suspend” appears to have the clearest policy rationale as it provides an incentive for individuals to work longer. %I Center for Retirement Research at Boston College %G eng %U https://crr.bc.edu/working-papers/unusual-social-security-claiming-strategies-costs-and-distributional-effects/ %0 Report %D 2009 %T What the Stock Market Decline Means for the Financial Security and Retirement Choices of the Near-Retirement Population %A Alan L Gustman %A Thomas L. Steinmeier %A N. Tabatabai %K Consumption and Savings %K Net Worth and Assets %K Social Security %X This paper investigates the effect of the current recession on the near-retirement age population. Data from the Health and Retirement Study suggest that those approaching retirement age (early boomers ages 53 to 58 in 2006) have only 15.2 percent of their wealth in stocks, held directly or in defined contribution plans or IRAs. Their vulnerability to a stock market decline is limited by the high value of their Social Security wealth, which represents over a quarter of the total household wealth of the early boomers. In addition, their defined contribution plans remain immature, so their defined benefit plans represent sixty five percent of their pension wealth. Simulations with a structural retirement model suggest the stock market decline will lead the early boomers to postpone their retirement by only 1.5 months on average. Health and Retirement Study data also show that those approaching retirement are not likely to be greatly or immediately affected by the decline in housing prices. We end with a discussion of important difficulties facing those who would use labor market policies to increase the employment of older workers. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %L newpubs20091202_w15435.pdf %4 Wealth/Stock Market/Retirement Saving/Retirement Wealth/Social Security expectations %$ 21420 %R 10.3386/w15435 %0 Report %D 2008 %T The Characteristics of Social Security Beneficiaries Who Claim Benefits at the Early Entitlement Age %A Xiaoyan Li %A Michael D Hurd %A Loughran, David %K Retirement Planning and Satisfaction %K Social Security %I AARP Public Policy Institute %G eng %U http://assets.aarp.org/rgcenter/econ/2008_19_beneficiaries.pdf %4 social Security/retirement planning/early Retirement %$ 25990 %0 Report %D 2008 %T Does the Rise in the Full Retirement Age Encourage Disability Benefits Applications? Evidence from the Health and Retirement Study %A Xiaoyan Li %A Nicole Maestas %K Disabilities %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X As the Social Security full retirement age rises, the relative generosity of Social Security retirement benefits compared to disability benefits is declining, raising the incentive for insured people to apply for disability benefits. After controlling for other differences in observable characteristics, such as life-time earnings, we find that an average four month increase in the FRA slightly increases the two-year DI application rate by 0.04-0.30 percentage points. The effect is greater among those with a work limiting health problem (0.22-0.89 percentage points) %I Ann Arbor, University of Michigan %G eng %U https://mrdrc.isr.umich.edu/pubs/does-the-rise-in-the-full-retirement-age-encourage-disability-benefits-applications-evidence-from-the-health-and-retirement-study/ %4 social Security/disability benefits/retirement planning/Public Policy %$ 69818 %0 Report %D 2008 %T An 'Elastic' Earliest Eligibility Age for Social Security %A Haverstick, Kelly %A Margarita Sapozhnikov %A Natalia A. Zhivan %A Sass, Steven A. %K Social Security %K Social Security Eligibility %X In the early 1980s, Congress responded to the Social Security program’s long-term financing shortfall, in part, by raising the Full Retirement Age (FRA) from 65 to 67. When fully phased in, for those who turn 62 in 2022, workers will have to wait an additional two years to get the same monthly benefit. If they do not postpone claiming, the increase in the FRA will cut their benefits by about 13 percent. Congress did not change the earliest age at which workers can claim. This Earliest Eligibility Age (EEA) remains 62. When the increase in the FRA is fully phased in, workers who claim at 62 will get 70 percent, rather than 80 percent, of their FRA benefit. This has raised concerns that benefits claimed at the EEA will be too low, especially as retirees age and other sources of income decline. One response would be to raise the EEA from 62 to 64, in line with the two-year rise in the FRA. There are, however, two important objections to an increase in the EEA. The primary concern is that it would create hardship for those unable to work or find employment and who lack the resources to support themselves without working until age 64. A second objection is that raising the EEA is unfair to disadvantaged groups with low life expectancy. This brief addresses these concerns by considering an “Elastic” EEA, which gives different workers different earliest eligibility ages. %I Center for Retirement Research at Boston College %G eng %U https://crr.bc.edu/briefs/an-qelasticq-earliest-eligibility-age-for-social-security/ %0 Report %D 2008 %T How Does Modeling of Retirement Decisions at the Family Level Affect Estimates of the Impact of Social Security Policies on Retirement? %A Alan L Gustman %A Thomas L. Steinmeier %K modeling %K Policy %K Retirement %K Social Security %X This paper applies structural models of retirement and saving of two earner couples to explore the effects on retirement of two actuarially neutral policies, which we know from previous work can have a substantial effect on retirement if heterogeneity in time preference rates is allowed. The main question being investigated here is whether using a model that explicitly incorporates the retirement interactions of two working spouses yields a different evaluation of policies than when a much simpler model that treats the retirement decisions of the second spouse as exogenous is used. The findings indicate that unless the question of interest is specifically related to joint retirement issues, the effects of the two actuarially neutral policies being investigated are roughly equal whichever model is estimated. A second question explored in the paper is whether two earner and one earner households can be combined in the analysis. The effects of policy changes are clearly different for one earner and two earner households, but there is some evidence that the principal difference is due to the differing budget sets of the two groups. Though the estimated preference parameters are significantly different, the critical parameters governing responses to policy changes are similar. As a result, it seems plausible that unless the question being investigated involves looking at these two groups separately, the overall impact of the policy changes may be adequately assessed by combining the two groups, separately identifying them by a dummy variable. A third question involves the magnitude of the effects for these two specific policy changes. Increasing the Social Security early entitlement age from 62 to 64 would reduce the level of retirement for husbands from two earner households by 4.4-4.6 percentage points at age 62, and by 5.1-5.7 percentage points for wives. In contrast, this policy change would induce husbands from one earner households to reduce the level of retirement by 10.2 percentage points at age 62. In a system of personal accounts, offering Social Security benefits as a lump sum instead of as an annuity would increase the level of retirement for husbands from two earner households by 7.1-8.1 percentage points at age 62 and by 8.9 percentage points for husbands in one earner households, and by 2.8-3.2 percentage points for wives in two earner households. %I Michigan Retirement Research Center %C Ann Arbor, MI %8 10/2008 %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1287302 %0 Report %D 2008 %T How Much Do Respondents in the Health and Retirement Study Know About Their Tax-deferred Contribution Plans? A Crosscohort Comparison %A Irena Dushi %A Honig, Marjorie %K Pensions %K Social Security %X We use information from Social Security earnings records to examine the accuracy of survey responses regarding participation in tax-deferred pension plans. As employer-provided defined benefit pensions are replaced by voluntary contribution plans, employees understanding of the link between their annual contribution decisions and their post-retirement wealth is becoming increasingly important. We examine the extent to which wage-earners in the Health and Retirement Study correctly report their inclusion in tax-deferred contribution plans and, conditional on inclusion, their annual contributions. We use two samples representing different cohorts in two different periods: the original HRS cohort interviewed in 1992 at ages 51-61, and a combination of the War Babies and Early Baby Boomer cohorts at the same ages interviewed twelve years later. Our findings indicate that while respondents interviewed in 2004 were more likely to report correctly whether they were included in DC plans, they were no more accurate in reporting whether they contributed to their plans than respondents interviewed in 1992. Respondents in both cohorts, moreover, overestimated their annual contributions. In both 1992 and in 2004, the mean absolute difference between respondent-reported and Social Security earnings record contributions was 1.5 times larger than the mean earnings record contribution. %B University of Michigan Retirement Research Center Working Paper %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://deepblue.lib.umich.edu/bitstream/handle/2027.42/64473/wp201.pdf?sequence=1&isAllowed=y %4 pension Plans/social security earnings and benefits/Defined contribution pension plans %$ 25630 %0 Report %D 2008 %T Labor Supply Responses to Marginal Social Security Benefits: Evidence from Discontinuities %A Jeffrey B Liebman %A Erzo F. P. Luttmer %A Seif, David G %K Labor %K Labor Supply %K Social Security %X A key question for Social Security reform is whether workers currently perceive the link on the margin between the Social Security taxes they pay and the Social Security benefits they will receive. We estimate the effects of the marginal Social Security benefits that accrue with additional earnings on three measures of labor supply: retirement, hours, and labor earnings. We develop a new approach to identifying these incentive effects by exploiting five provisions in the Social Security benefit rules that generate discontinuities in marginal benefits or non-linearities in marginal benefits that converge to discontinuities as uncertainty about the future is resolved. We find clear evidence that individuals approaching retirement (age 52 and older) respond to the Social Security tax-benefit link on the extensive margin of their labor supply decisions: we estimate that a 10 percent increase in the net-of-tax share reduces the two-year retirement hazard by a statistically significant 2.1 percentage points from a base rate of 15 percent. The evidence with regards to labor supply responses on the intensive margin is more mixed: we estimate that the elasticity of hours with respect to the net-of-tax share is 0.41 and statistically significant, but we do not find a statistically significant earnings elasticity. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %R 10.3386/w14540 %0 Journal Article %J Journal of Economic and Social Measurement %D 2008 %T Measurement Error in Earnings Data in the Health and Retirement Study %A Bricker, Jesse %A Gary V. Engelhardt %K Methodology %K Social Security %X We provide new evidence on the extent of measurement error in respondent-reported earnings data by exploiting detailed W-2 records matched to older workers in the Health and Retirement Study (HRS). Our empirical findings are qualitatively consistent with the findings of previous studies. Mean measurement error in the 1991 HRS earnings data for men is somewhat larger than what has been found in other validation studies, but is still modest, averaging about 0.059 log points, approximately 5.9 percent, or 1,500. For women in 1991, it is 0.067 log points, approximately 6.7 percent, or 916. We find a negative correlation between the measurement error and the true value of earnings as measured by the W-2 records, which indicates the presence of non-classical measurement error. For men and women, this error shows little correlation with a standard set of cross-sectional earnings determinants. The one exception is that the measurement error rises with reported education. The bias on the OLS parameter estimate of the impact of having a college degree or higher (relative to a high school drop-out) from using the respondent-reported rather than the W-2 earnings is positive and estimated to be 0.071 log points, or roughly a bias of 7 percent. %B Journal of Economic and Social Measurement %I 33 %V 33 %P 39-61 %G eng %N 1 %L newpubs20090302_wp_2007-16.pdf %4 Earnings and Benefits File/Measurement %$ 19930 %R http://dx.doi.org/10.2139/ssrn.1297452 %0 Journal Article %J Journal of Economics %D 2008 %T Social security and the retirement and savings behavior of low-income households %A van der Klaauw, Wilbert %A Wolpin, Kenneth I. %K Retirement %K Social Security %K structural estimation %X In this paper, we develop and estimate a model of retirement and savings incorporating limited borrowing, stochastic wage offers, health status and survival, social security benefits, Medicare and employer-provided health insurance coverage, and intentional bequests. The model is estimated on a sample of relatively poor households from the first three waves of the Health and Retirement Study (HRS), for whom we would expect social security income to be of particular importance. The estimated model is used to simulate the responses to changes in social security rules, including changes in benefit levels, in the payroll tax, in the social security earnings tax and in early and normal retirement ages. Welfare and budget consequences are estimated. %B Journal of Economics %V 145 %G eng %N 1-2 %& 21-42 %R 10.1016/j.jeconom.2008.05.004 %0 Thesis %D 2008 %T Toward a demographic divide? Equity, race, and Social Security %A Accius, Jean C., II %K Healthcare %K Public Policy %K Racial/ethnic differences %K Social Security %X The retirement system within the United States for millions of Americans revolves around Social Security. Social Security is a policy that was designed to ensure economic security to individuals who contributed into the system while working and now have transitioned into retirement. Yet, the combination of conflicting goals, demographic trends, and inadequate assumptions in the design of the Social Security program has threatened its solvency. With these concerns have come various proposals to reform the system, including increasing the retirement age and privatizing the Social Security program. These proposals have spurred social equity concerns regarding the potential adverse impacts on the ability of minorities and/or low-income individuals to retire. While race is typically proffered as social equity concerns when it comes to Social Security and its accompanying reforms, it is possible that this cleavage is not the most important one for policy makers to anticipate and attempt to cope with in the future. As a result, this study seeks to address the following questions in more rigorous, robust, and sophisticated ways than has prior research: Are there differences by race in retirement decisions, controlling for other factors such as class? If differences do exist, what are their social equity implications for society? How might any social inequities that might exist be best addressed in the United States? To address these questions, this study combines qualitative as well as quantitative research using the Health and Retirement Study (HRS) to examine, from 1992 to 2004, the retirement behaviors of Americans born between 1931 and 1941. Logistic regressions were used to decompose the differences in retirement decisions across racial groups while controlling for demographic, economic, and quality of life factors. The analysis revealed that, controlling for economic and health variables, statistically significant differences among races in retirement decisions did not exist. Overall, this study suggests that the most important focus of policymakers seeking the most cost-effective way to address social inequities related to retirement decisions is to focus proactively on ways to address poverty and poor health, and reactively , to focus social services on attenuating the worst impacts of social inequities. %I The American University %C United States -- District of Columbia %8 2008 %G eng %! Toward a demographic divide? Equity, race, and Social Security %0 Report %D 2008 %T When Should Married Men Claim Social Security Benefits? %A Sass, Steven A. %A Wei Sun %A Anthony Webb %K Adult children %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Most married men claim Social Security benefits at age 62 or 63, well short of the age that maximizes the expected present value of the average household s benefits. That many married men leave money on the table is surprising. It is also problematic. It results in much lower benefits for surviving spouses and the low incomes of elderly widows are a major social problem. If married men delayed claiming Social Security benefits, retirement income security would significantly improve. This brief focuses on the potential gains from delayed claiming and the factors that may influence claiming behavior. It then considers possible policy responses. %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/briefs/when-should-married-men-claim-social-security-benefits/ %L newpubs20081014_ib_8-4.pdf %4 Social Security benefit claiming/Claiming behavior/Claiming behavior/Marital Status/retirement planning/public Policy/retirement income / United States. %$ 19470 %0 Report %D 2008 %T Who Values the Social Security Annuity? New evidence on the annuity puzzle %A Brown, Jeffrey R. %A Casey, Marcus D. %A Olivia S. Mitchell %K Methodology %K Net Worth and Assets %K Pensions %K Social Security %X We examine individuals' self-reported willingness to exchange part of their Social Security inflation-indexed annuity benefit for an immediate lump-sum payment, using an experimental module in the 2004 Health and Retirement Study. Our first finding is that nearly three out of five respondents favor the lump-sum payment if it were approximately actuarially fair, a finding that casts doubt on several leading explanations for why more people do not annuitize. Second, there is some modest price sensitivity and evidence consistent with adverse selection; in particular, people in better health and having more optimistic longevity expectations are more likely to choose the annuity. Third, after controlling on education, more financially literate individuals prefer the annuity. Fourth, people anticipating future Social Security benefit reductions are more likely to choose the lump-sum, suggesting that political risk matters. Other factors such as sex, marital status, income, wealth, or the presence of children are not associated with respondents' relative preferences for the annuity versus the lump-sum. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %4 Social Security/Social Security Research/lump sum distributions/Annuities %$ 19590 %R 10.3386/w13800 %0 Journal Article %J Review of Economics and Statistics %D 2007 %T Future Social Security Entitlements and the Retirement Decision %A Courtney Coile %A Gruber, Jonathan %K Employment and Labor Force %K Methodology %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X A critical question for Social Security policy is how program incentives affect retirement behavior. We use the Health and Retirement Survey (HRS) to examine the impact of Social Security incentives on male retirement. We implement forward-looking models whereby individuals consider the incentives to work in all future years. We find that forwardlooking incentive measures for Social Security are significant determinants of retirement. We also find that private pension incentives have roughly similar effects. Our findings suggest that Social Security policies that increase the incentives to work at older ages can significantly reduce the labor force exit rate of older workers. %B Review of Economics and Statistics %I 89 %V 89 %P 234-246 %G eng %N 2 %L coilegruber20103.pdf %4 Retirement planning/Labor Supply/Social Security Research/Social Security benefit claiming/Entitlements %$ 20130 %R https://doi.org/10.1162/rest.89.2.234 %0 Report %D 2007 %T How do Immigrants Fare in Retirement? %A Purvi Sevak %A Lucie Schmidt %K Demographics %K Net Worth and Assets %K Pensions %K Social Security %X Existing literature suggests that immigrants receive lower wages than U.S.-born workers with similar characteristics. This could imply that immigrant households would enter retirement at a significant financial disadvantage. In this paper, we examine the retirement resources available to immigrant families by examining Social Security benefits, pension coverage, and private wealth accumulation. Our results suggest that although immigrant families may be financially better-off in the U.S. than in their native countries, they do enter retirement at a significant financial disadvantage relative to native born households with similar characteristics. %B University of Michigan Retirement Research Center Working Paper %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://deepblue.lib.umich.edu/handle/2027.42/57433 %L newpubs20080229_wp169.pdf %4 Immigrants/Retirement Wealth/Social Security/Pensions %$ 18380 %0 Report %D 2007 %T A Longitudinal Analysis of Entries and Exits of the Low-Income Elderly to and from the Supplemental Security Income Program %A Powers, Elizabeth %A Todd E. Elder %K Demographics %K Social Security %X This paper is the first to analyze eligibility and participation spells and estimate dynamic models of SSI participation by the aged. We first describe eligibility and participation spells and estimate competing-risk models of the determinants of transitions. Next, we present evidence of extensive measurement error in the expected SSI benefit and the associated imputed eligibility status of sample members. We compare and contrast two approaches to ameliorating this error. A cross-section approach exploits self-reports of participants benefits, and a longitudinal approach makes inferences from time variation in the computed benefit. We find that the hazard model estimates vary little with regard to whether or which particular measurement error correction is employed. Finally, the longitudinal patterns of eligibility and participation suggest that take-up rates among the persistently eligible are nearly 80 percent. %B Michigan Retirement and Disability Research Center Publication %I Michigan Retirement and Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1095868 %L newpubs20080822_wp156 %4 Supplemental Security Income/Elderly/Low Income Groups %$ 19290 %0 Report %D 2007 %T Managing the Risk of Life %A Delavande, Adeline %A Robert J. Willis %K Expectations %K Social Security %X This study analyzes the role of individual s and spouse s survival expectations and knowledge about Social Security rules on the expected Social Security claiming age, taking into account the various incentives single and married individuals face. There is substantial heterogeneity in the level of knowledge about SS rules according to demographic characteristics. We find that single men and women who expect to be longlived plan on delaying Social Security claiming. When we allow for differential effects of survival on knowledge about Social Security rules, subjective survivals matter only for single women who are knowledgeable. For single men, knowledge is not so important in their decisions. The claiming decision of married individuals is more complicated, because they are entitled to spouse s and survivor s benefits. Consistent with the incentives provided by Social Security rules, we find that married men base their expected claiming age on their spouse s survival expectations but not on their own survival. For married women, both own and spouse s subjective survivals positively influence the timing of claiming. Knowledge about Social Security rules affects the expected claiming age of both married men and women. %B Michigan Retirement and Disability Research Center Research Paper %I Michigan Retirement and Disability Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1082051 %L newpubs20080229_wp167.pdf %4 Subjective Probabilities of Survival/Social Security/Social Security benefit claiming %$ 18390 %0 Report %D 2007 %T A New Approach to Raising Social Security's Earliest Eligibility Age. %A Triest, Robert K. %A Haverstick, Kelly %A Margarita Sapozhnikov %A Natalia A. Zhivan %K Social Security %K Social Security Eligibility %X While Social Security’s Normal Retirement Age (NRA) is increasing to 67, the Earliest Eligibility Age (EEA) remains at 62. Similar plans to increase the EEA raise concerns that they would create excessive hardship on workers that are worn-out or in bad health. One simple rule to increase the EEA is to tie an increase to the number of quarters of covered earnings. Such a provision would allow those with long worklives — presumably the less educated and lower paid — to quit earlier. We provide evidence that this simple rule would not satisfy the goal of preventing undue hardship on certain workers. Thus, this paper considers an alternative policy that ties an increase in the EEA to individuals’ Average Indexed Monthly Earnings (AIME). We show that allowing workers with low AIME to continue to be eligible to receive benefits at age 62 has promise as a policy to protect workers who have low earnings and are in poor health from hardship associated with an increase in the EEA. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/working-papers/a-new-approach-to-raising-social-securitys-earliest-eligibility-age/ %0 Journal Article %J Journal of Policy Analysis and Management %D 2007 %T The Social Security Earnings Test and Work Incentives %A Hugo Benítez-Silva %A Frank Heiland %K Employment and Labor Force %K Retirement Planning and Satisfaction %K Social Security %X The labor supply and benefit claiming incentives provided by the early retirement rules of the Social Security Old Age benefits program are of growing importance as the Normal Retirement Age (NRA) increases to 67, the labor force participation of Older Americans rises, and a variety of reforms to the Social Security system are considered. Any reform needs to take into account the effects and rationale of the Social Security Earnings Test and the Actuarial Adjustment Factor, which are likely to be widely misunderstood due to the relatively little attention paid by policymakers and researchers to the fact that Americans are willing to work while receiving benefits. We describe these incentives and emphasize that individuals who claim benefits before the NRA but continue to work, or return to the labor force, can reduce the early retirement penalty by suspending the collection of monthly benefits if they earn above the Earnings Test limit. We then argue that the Earnings Test can be distortionary and is costly to administer, and that these characteristics are inflated by the lack of information given to Older Americans regarding the consequences of working while receiving retirement benefits. We present results from statistical models of labor force exit behavior using data from the Health and Retirement Study showing the relevance of these incentives, and investigate the importance of informational asymmetries among beneficiaries regarding benefit withholding using a dynamic life-cycle model of labor supply and benefit claiming. We then use the latter framework to compare the behavioral and welfare implications of a removal of the Earnings Test to the policy of providing more information regarding the Earnings Test and the adjustment of the rate of benefit pay to Older Americans. 2007 by the Association for Public Policy Analysis and Management. %B Journal of Policy Analysis and Management %I 26 %V 26 %P 527 %G eng %U https://www.jstor.org/stable/30163415 %N 3 %L newpubs20070611_SSEarnings.pdf %4 Retirement Behavior/Labor Force Participation/Social Security benefit claiming %$ 17840 %0 Report %D 2007 %T Why Do Married Men Claim Social Security Benefits So Early? Ignorance or Caddishness? %A Anthony Webb %A Wei Sun %A Sass, Steven A. %K Social Security %K Social Security Benefits %X Most married men claim Social Security benefits at age 62 or 63, well short of both Social Security’s Full Retirement Age and the age that maximizes the household’s expected present value of benefits (EPVB). This results in a loss of less than 4 percent in household EPBV. But essentially the entire loss is borne by the survivor benefit, falls nearly 20 percent. As many elderly widows have very low incomes, early claiming by married men is a major social problem. Regression results found no association between early claiming and caddishness or the ability of husbands to make claiming decisions independently. The one statistically significant finding is the association of college education and later claiming, which cautiously take to indicate greater financial awareness. This suggests that an effective educational campaign might be able to raise the claiming ages of married men and improve widows’ retirement income security. But financial education has not been especially effective in changing behavior. Policymakers should thus consider other initiatives to assure a survivor benefit greater than that produced by an age 62 or 63 husbands’ claiming age. Such initiatives include raising the Earliest Eligibility Age, requiring spousal consent for claiming prior to the Full Retirement Age, and preserving the survivor benefit at its Full Retirement Age value and allowing the higher-earning spouse to access only a portion of his (or her) Primary Insured Amount prior to the Full Retirement Age. %I Center for Retirement Research at Boston College %G eng %U https://crr.bc.edu/working-papers/why-do-married-men-claim-social-security-benefits-so-early-ignorance-or-caddishness/ %0 Journal Article %J Journal of Political Economy %D 2006 %T Are Americans saving "optimally" for retirement? %A John Karl Scholz %A Ananth Seshadri %A Khitatrakun, Surachai %K life cycle model %K optimal saving %K Social Security %X We solve each household's optimal saving decisions using a life cycle model that incorporates uncertain lifetimes, uninsurable earnings and medical expenses, progressive taxation, government transfers, and pension and social security benefits. With optimal decision rules, we compare, household by household, wealth predictions from the life cycle model using a nationally representative sample. We find, making use of household-specific earnings histories, that the model accounts for more than 80 percent of the 1992 cross-sectional variation in wealth. Fewer than 20 percent of households have less wealth than their optimal targets, and the wealth deficit of those who are undersaving is generally small. %B Journal of Political Economy %V 114 %G eng %N 607-643 %R 10.1086/506335 %0 Report %D 2006 %T Consumption, Retirement, and Social Security: Evaluating the Efficiency of Reform with a Life-Cycle Model %A John Laitner %A Daniel S. Silverman %K Consumption and Savings %K Public Policy %K Social Security %X This paper analyzes the effect of a potential reform to the Social Security system on individuals retirement and consumption choices. We first estimate the coefficients for a life cycle model. We assume intratemporally nonseparable preference orderings and endogenous retirement. Our framework allows the possibility of disability. The specification predicts a change in consumption at retirement; we use the empirical magnitude of the change, together with desired retirement age, to identify key parameters such as the curvature of the utility function. We then qualitatively and quantitatively study the possible long run effect of a Social Security reform in which individuals no longer face the OASI payroll tax after some specified age, and their subsequent earnings have no bearing on their Social Security benefits. Simulations indicate that retirement ages would rise by as much as one year, equivalent variations could average 5000 (1984 dollars) per household or more, and reform could generate 2500 or more additional income tax revenue per household. %I The University of Michigan, Michigan Retirement Research Center %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/ %L newpubs20070125_Laitner-Silverman_wp142 %4 Social Security/Consumption/Tax Policy %$ 17050 %0 Journal Article %J J Gerontol B Psychol Sci Soc Sci %D 2006 %T Crediting care or marriage? Reforming Social Security family benefits. %A Herd, Pamela %K Family %K Female %K Humans %K Insurance Benefits %K Marital Status %K Mothers %K Social Security %K United States %X

OBJECTIVE: For more than 20 years policy advocates and policymakers have argued that Social Security should reward women for raising children. Current family benefits, which only benefit women who marry, are thought to be outdated and unable to protect the neediest women. Thus, would Black and poor women fare better if family benefits were linked to parenthood, as opposed to marriage? I examined three care credit proposals that reflect the most common proposals put forth in the United States and the most common designs in other countries.

METHODS: I used the 1992 Health and Retirement Study and the Current Population Survey to create a policy simulation that estimates how women reaching age 62 from 2020 to 2030 would be affected by care credits.

RESULT: Black and poor women fared best with benefits linked to parenthood. The specific proposal allowed parents, from the 35 earnings years used to calculate their benefit, to substitute $15,000 for up to 9 earnings' years that fell below this level.

DISCUSSION: The poorest women fare better with family benefits linked to parenthood instead of marital status. Moreover, they fare best when working women can benefit from care credits, but the care credit's value is not linked to earnings.

%B J Gerontol B Psychol Sci Soc Sci %I 61 %V 61 %P S24-34 %8 2006 Jan %G eng %N 1 %L pubs_2006_HerdJoG.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/16399946?dopt=Abstract %4 Social Security/Marriage/Parent/Women %$ 15630 %R 10.1093/geronb/61.1.s24 %0 Report %D 2006 %T A Dynamic Model of Retirement and Social Security Reform Expectations: A Solution to the New Early Retirement Puzzle %A Hugo Benítez-Silva %A Debra S. Dwyer %A Sanderson, Warren C. %K Expectations %K Health Conditions and Status %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X The need for Social Security Reform in the next years is hardly a matter of debate. Therefore, the widespread believe among Americans that Social Security will not be able to pay benefits in the long run at the level that was anticipated, does not come as a surprise. The government acknowledges the situation, and predicts that substantial benefits cuts will be necessary, yet no legislation has been passed to tackle the problem. Researchers, however, have rarely modeled the uncertainty over Social Security reform and benefit levels, and how they affect claiming behavior and retirement. The purpose of this paper is to assess the extent to which these perceptions of future cuts might explain the puzzle of earlier take-up despite bigger penalties to doing so in the presence of increasing longevity. By introducing a small amount of uncertainty (based on self-reported responses to questions regarding expectations over future cuts) of a relatively small cut (compared with what the government reports as necessary to solve the crisis) in a dynamic life-cycle model of retirement, we are able to match the claiming behavior observed in the data, without relying on heterogeneous preferences. Our results support the hypothesis that expectations over future benefits are affecting current behavior. We find that a mis-specified dynamic retirement model would erroneously predict that an increase in the NRA would delay claiming behavior and increase labor supply at older ages. Once the appropriate earnings test incentives are modeled, and we account for the probability of reforms to the system, an increase in the NRA has little effect on claiming behavior, and it can even increase the proportion of individuals claiming before the NRA. %B Michigan Retirement Research Center Research Paper %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %L newpubs20070125_MRRCwp134 %4 Social Security benefit claiming/Claiming behavior/Claiming behavior/Longevity/retirement planning/Public Policy/expectations %$ 17130 %R http://dx.doi.org/10.2139/ssrn.1095253 %0 Report %D 2006 %T How Did the Elimination of the Earnings Test Above the Normal Retirement Age Affect Retirement Expectations? %A Pierre-Carl Michaud %A Arthur H.O. vanSoest %K Retirement Planning and Satisfaction %K Social Security %X This study examines the effect of the 2000 repeal of the earnings test above the normal retirement age on retirement expectations of workers aged 51 to 61 their probabilities to work past age 62 and 65 as well as the age at which they expect to start claiming old age social security benefits. We use administrative records linked to the HRS to create variables that accurately reflect the change in financial incentives. For men, we find results in line with theoretical predictions on the probability to work after age 65. For example, men whose marginal wage rate increased when the earnings test was repealed, showed the largest increase in the probability to work full-time past normal retirement age. For women, we do not find significant results, possibly due to omitting spouse benefits and their interaction with the earnings test. We also do not find significant evidence of effects of the repeal of the earnings test on the probability to work past age 62 or the expected claiming age. On the other hand, for those reaching the normal retirement age, deviations between the age at which Social Security benefits are actually claimed and the previously reported expected age are more negative in 2000 than in 1998, suggesting that the repeal has increased claiming immediately after reaching normal retirement age. Since our calculations show that the tax introduced by the earnings test was small when accounting for actuarial benefit adjustments and differential mortality, our results suggest that although workers form expectations in a way consistent with forward-looking behavior, they misperceive the complicated rules of the earnings test. %I The University of Michigan, Michigan Retirement Research Center %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/ %L newpubs20070125_MRRCwp135 %4 Retirement Behavior/Social Security benefit claiming %$ 17100 %0 Report %D 2006 %T The Impact of Misperceptions about Social Security on Saving and Well-Being %A Susann Rohwedder %A Arthur H.O. vanSoest %K Net Worth and Assets %K Social Security %X Earlier research suggests that many people in their fifties and early sixties are not well informed about their Social Security entitlements. This paper investigates the effect of deviations between predicted and realized Social Security benefits on several measures of well-being in retirement, such as the change in consumption expenditures at retirement, a self-assessed measure of how retirement years compare to the years before retirement, and whether the individual is worried about having enough income to get by in retirement. The analysis is based upon US data from the Health and Retirement Study, following individuals over a long time period from their fifties into retirement. We find clear evidence that people who over estimated their Social Security benefits are worse off according to several measures of well being in retirement. This relationship seems to be more pronounced for respondents who claimed benefits earlier than anticipated than for those who were simply misinformed. %I The University of Michigan, Michigan Retirement Research Center %G eng %U http://www.mrrc.isr.umich.edu %L wp_2006/MRRCwp118.pdf %4 Social Security/Retirement Wealth %$ 16630 %0 Journal Article %J J Gerontol Soc Work %D 2006 %T Increased wealth and income as correlates of self-assessed retirement. %A Caputo, Richard K. %K Aged %K Data collection %K Employment %K Female %K Financing, Personal %K Humans %K Income %K Interviews as Topic %K Male %K Middle Aged %K Motivation %K Organizational Policy %K Pensions %K Retirement %K Self-Assessment %K Social Security %K Socioeconomic factors %K United States %X

This study examined whether retirement implies complete withdrawal from the labor force and the role that increased wealth and income play in regard to the nature of retirement. Data came from the Health & Retirement Study, Waves 1-5. Findings indicated that most study sample pre-retirees remained in the labor force as they moved into what are considered the normal retirement years. As they moved on average from 50+ years of age to 60+ years of age, increasing percentages of study sample pre-retirees reported themselves as completely retired. Those who viewed themselves as completely retired were far less likely to work than those who did not view themselves as completely retired. Of particular importance was the finding that increased income in 2000 decreased the likelihood of self-reported complete retirement. Equally important was the finding that increased assets had no effect on retirement status with the exception of survey year 1998 when increased assets decreased the likelihood of viewing oneself as completely retired. Findings suggested that pro-work retirement policies aimed at increasing labor force participation among pre-retirees and increasing the normal retirement age can be effective. Five pro-work policies were discussed.

%B J Gerontol Soc Work %I 47 %V 47 %P 175-201 %8 2006 %G eng %N 1-2 %1 http://www.ncbi.nlm.nih.gov/pubmed/16901883?dopt=Abstract %4 Labor Force/Retirement Behavior/Retirement Incomes %$ 16760 %R 10.1300/J083v47n01_11 %0 Journal Article %J J Gerontol Soc Work %D 2006 %T Postretirement earnings relative to preretirement earnings: gender and racial differences. %A Martha N. Ozawa %A Hong, Baeg-Eui %K Age Factors %K Aged %K Aged, 80 and over %K Data collection %K Employment %K Female %K Humans %K Income %K Male %K Men %K Minority Groups %K Pensions %K Retirement %K Salaries and Fringe Benefits %K Sex Factors %K Social Security %K Time Factors %K United States %K White People %K women %X

As the social security program comes under increasing financial pressure in the coming decades, the federal government will encourage elderly people to continue to work. Data from the Social Security Administration indicate that earnings are already a sizable component of retirement income. But there is public concern about how women and minorities will fare economically in this changing policy environment. To what extent can women and minorities keep earning money after they reach retirement age? This article presents the results of a study that investigated the postretirement earnings, relative to the preretirement earnings, of women and minorities, and compared the results with those for men and whites. The major finding, based on regression analyses, was that women's postretirement earnings, relative to their preretirement earnings, were greater than those of men. Furthermore, the regression results indicate that nonwhites' postretirement earnings could not be predicted by their preretirement earnings or by any of the independent variables used in the study, including age, gender, education, marital status, number of children, occupation, and preretirement earnings.

%B J Gerontol Soc Work %I 32 %V 47 %P 63-82 %8 2006 %G eng %N 3-4 %1 http://www.ncbi.nlm.nih.gov/pubmed/17062523?dopt=Abstract %3 17062523 %4 Employment/Retirement/WOMEN/Gender Differences/Labor Force Participation/Socioeconomic Status/Marital Status/Vulnerability/gerontology %$ 22000 %R 10.1300/J083v47n03_05 %0 Report %D 2006 %T Probabilistic Thinking and Early Social Security Claiming %A Delavande, Adeline %A Michael M. Perry %A Robert J. Willis %K Methodology %K Retirement Planning and Satisfaction %K Social Security %X This study analyzes the extent to which an individual.s survival expectations influence his or her decision to claim social security benefits at an early age. We find that subjective survival probabilities capture meaningful behavioral responses to incentives for early Social Security claiming when they are purged of measurement error using risk factors as instruments. Among people who are still working at age 62, those who expect to live longer are likely to delay claiming of Social Security benefits to a degree that is both statistically and economically significant. %I The University of Michigan, Michigan Retirement Research Center %G eng %U http://www.mrrc.isr.umich.edu/publications/papers/ %L newpubs20070125_Delavande_etal_2006 %4 Probability/Social Security benefit claiming/Early Retirement %$ 17000 %0 Journal Article %J Gerontologist %D 2006 %T Retirement patterns from career employment. %A Kevin E. Cahill %A Michael D. Giandrea %A Joseph F. Quinn %K Aged %K Aged, 80 and over %K Aging %K Career Choice %K Employment %K Female %K Health Status %K Humans %K Income %K Male %K Middle Aged %K Pensions %K Retirement %K Social Security %K United States %X

PURPOSE: This article investigates how older Americans leave their career jobs and estimates the extent of intermediate labor force activity (bridge jobs) between full-time work on a career job and complete labor-force withdrawal.

DESIGN AND METHODS: Using data from the Health and Retirement Study, we explored the work histories and retirement patterns of a cohort of retirees aged 51 to 61 in 1992 during a 10-year period in both cross-sectional and longitudinal contexts. We examined determinants of retirement patterns in a multinomial logistic regression model.

RESULTS: We found that a majority of older Americans with career jobs retire gradually, in stages, rather than all at once. We also found that the utilization of bridge jobs was more common among younger respondents, respondents without defined-benefit pension plans, and respondents at both the lower and upper ends of the wage distribution.

IMPLICATIONS: Older Americans are now working longer than pre-1980s trends would have predicted. Given concerns about the traditional sources of retirement income (Social Security, employer pensions, and prior savings), older Americans may have to rely more on earnings. This article suggests that many are already doing so by moving to bridge jobs after leaving their career employment.

%B Gerontologist %I 46 %V 46 %P 514-23 %8 2006 Aug %G eng %N 4 %L pubs_2006_Cahill_etal.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/16921005?dopt=Abstract %4 Labor Force Attachment/Bridge Jobs/Retirement Behavior %$ 16840 %R 10.1093/geront/46.4.514 %0 Report %D 2006 %T Social Security Replacement Rates for Alternative Earnings Benchmarks %A John W R Phillips %A Olivia S. Mitchell %K Public Policy %K Social Security %X Social Security reform proposals are often presented in terms of their differential impacts on hypothetical or example workers. Our work explores how different benchmarks produce different replacement rate outcomes. We use the Health and Retirement Study (HRS) to evaluate how Social Security benefit replacement rates differ for actual versus hypothetical earner profiles, and we examine whether these findings are sensitive to alternative definitions of replacement rates. We find that workers with the median HRS profile would be estimated to receive benefits worth 55 of lifetime average earnings, versus 48 for the SSA medium scaled profile. Since US policymakers tend to prefer a replacement rate measure tied to workers own past earnings, using these metrics would yield higher replacement rates compared to commonly used scaled illustrative profiles. However, benchmarks that use population as opposed to individual earnings measures to compare individual worker benefits to pre-retirement consumption produce lower replacement rates for HRS versus hypothetical earners. %B Pension Research Council Working Paper %I The Wharton School, University of Pennsylvania %C Philadelphia, PA %G eng %U https://pensionresearchcouncil.wharton.upenn.edu/publications/papers-2018/social-security-replacement-rates-for-alternative-earnings-benchmarks/ %L wp_2006/MRRCwp116.pdf %4 Social Security/POLICY %$ 16530 %0 Journal Article %J Benefits Quarterly %D 2006 %T Social Security Replacement Rates for Alternative Earnings Benchmarks %A Olivia S. Mitchell %A John W R Phillips %K Retirement Planning and Satisfaction %K Social Security %X Social Security reform proposals are often presented in terms of their differential impacts on hypothetical or example workers. This article explores how different benchmarks produce different replacement rate outcomes. The authors use the Health and Retirement Study (HRS) from the University of Michigan to evaluate how Social Security benefit replacement rates differ for actual versus hypothetical earner profiles, and examine whether these findings are sensitive to alternative definitions of replacement rates. They conclude that more precise analyses of possible distributional patterns from Social Security reform proposals would follow if benefit estimates were derived from actual earnings profiles, rather than hypothetical scaled patterns. %B Benefits Quarterly %I 22 %V 22 %P 37 %G eng %N 4 %L newpubs20070125_Mitchell-Phillips_BQ %4 Social Security and Public Pensions/Retirement Planning %$ 16940 %0 Journal Article %J The Gerontologist %D 2005 %T Ensuring a Minimum: Social Security Reform and Women %A Herd, Pamela %K Social Security %K Women and Minorities %X Purpose: The potential effects of implementing three different minimum benefits in Social Security, which have accompanied proposals to privatize the program and reform family benefits, are examined in relation to the adequacy of benefits for women reaching age 62 between 2020 and 2030. Design and Methods: The 1992 Health and Retirement Study is used to conduct a simplified microsimulation. Results: The minimum benefit proposal accompanying privatization proposals, which requires 40 earnings years for a poverty level benefit, fails to cover significant numbers of vulnerable women. The elimination of spousal benefits, criticized for being outdated and regressive, helps offset the costs of more generous minimum benefits, such as those that require residency or 10 earnings years for eligibility. Implications: Noncontributory benefits distributed based on marital status are not as effective at protecting poorer women, as well as a new generation of women that is less likely to be married, than are minimum benefits where eligibility is tied to U.S. residency or simply Social Security eligibility. %B The Gerontologist %I 45 %V 45 %P 12-25 %G eng %U http://gerontologist.gerontologyjournals.org/content/vol45/issue1/ %N 1 %L pubs_2005_Herd_Geron.pdf %4 Social Security/Women %$ 14132 %0 Report %D 2005 %T How Much Pre-Retirement Income Does Social Security Replace? %A Alicia H. Munnell %A Soto, Mauricio %K Income %K Social Security %X Do today's retirees have sufficient income to meet their needs? One common way to address this question is to determine a household's replacement rate. The replacement rate gauges the extent to which retirement income allows workers to maintain their pre-retirement standard of living. In the U.S. retirement income system, Social Security is the single most important source for most people. It provides a basic level of replacement, upon which individuals can build through additional saving. This brief addresses the question of how much pre-retirement income Social Security replaces for current recipients. Subsequent briefs will provide a more comprehensive evaluation of replacement rates by including income from employer-sponsored pensions, other savings, and housing equity, as well as Social Security. The first section of this brief explains the concept of a replacement rate and discusses how much people need for a comfortable retirement. The second section describes how Social Security replacement rates are constructed for this analysis and then reports results for individuals and households. The final section summarizes the key findings. %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/briefs/how-much-pre-retirement-income-does-social-security-replace/ %L wp_2005/ib_36.pdf %4 Retirement Incomes/Social Security %$ 15500 %0 Journal Article %J Industrial Relations %D 2005 %T Imperfect Knowledge of Social Security and Pensions %A Alan L Gustman %A Thomas L. Steinmeier %K Education %K Pensions %K Social Security %X Using data from the Health and Retirement Study, this paper creates variables measuring knowledge about future social security and pension benefits by comparing respondent reports of their expected benefits with benefits calculated from social security earnings records and employer provided descriptions of pension plans. The knowledge measures suggest that misinformation, imprecision and lack of information about retirement benefits is the norm. Those who are most dependent on social security are the least well informed about their social security benefits, while those who are most dependent on pensions are best informed about their pension benefits. Women and minorities are less well informed about both types of retirement benefits. Having documented the extent of misinformation, we turn to questions about the production of information, and the consequences of misinformation for real outcomes. Relating measures of information to planning activities, we find that those who plan are somewhat better informed than those who do not, but with the exception of having requested a social security earnings record, the effects of planning activities on knowledge are modest. In descriptive and reduced form equations for planned and actual retirement and saving, there is at best a modest relation of knowledge measures to planned and actual retirement and to nonpension, nonsocial security wealth as a share of lifetime earnings. Individuals who overestimate their benefits are likely to retire sooner than they planned, but the measured effects are relatively modest. Coefficients of measures of the increase in reward from postponed retirement are barely affected by the addition of measures of respondent knowledge of their retirement benefits to standard reduced form retirement and wealth equations. %B Industrial Relations %I 44 %V 44 %P 373-397 %G eng %N 2 %L pubs_2005_Gust-Stein_Imperfect.pdf %4 Pensions/Social Security/Knowledge %$ 13032 %R https://doi.org/10.1111/j.0019-8676.2005.00389.x %0 Journal Article %J Soc Secur Bull %D 2005 %T Lifetime earnings, social security benefits, and the adequacy of retirement wealth accumulation. %A Engen, Eric M. %A William G. Gale %A Cori E. Uccello %K Adult %K Humans %K Income %K Middle Aged %K Models, Econometric %K Pensions %K Retirement %K Social Security %K United States %B Soc Secur Bull %I 66 %V 66 %P 38-57 %8 2005 %G eng %U https://www.ssa.gov/policy/docs/ssb/v66n1/v66n1p38.html %N 1 %L wp_2004/Engen-etal_2004-10.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/16295316?dopt=Abstract %4 Social Security expectations/Retirement Saving %$ 12472 %0 Journal Article %J National Tax Journal %D 2005 %T Retirement Effects of Proposals by the President's Commission to Strengthen Social Security %A Alan L Gustman %A Thomas L. Steinmeier %K Retirement %K Social Security %X The effects on retirement of proposals by the President's Commission to Strengthen Social Security are simulated using an econometric model of retirement and saving. In the absence of any policy reforms, and holding other market adjustments constant, increases in real wages are predicted to increase retirement from full time work at age 62 by 8.7 percentage points over the next 70 years. However, two leading proposals put forth by the Commission, model 2 and model 3, will offset almost half this trend, reducing retirement from full–time work at age 62 by roughly five and three percentage points, respectively. %B National Tax Journal %V 58 %P 27-49 %8 March %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=701296 %N 1 %0 Report %D 2005 %T Retirement, Saving, Benefit Claiming and Solvency Under a Partial System of Voluntary Personal Accounts %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Net Worth and Assets %K Social Security %X This paper is based on a structural model of retirement and saving, estimated with data for a sample of married men in the Health and Retirement Study. The model simulates how various features of a system of personal Social Security accounts jointly affects retirement, saving, the choice of whether benefits are taken as an annuity or lump sum, taxes paid and the course of benefits with age. Among our findings: Under a system of partial personal accounts, the fraction of 62 year olds at full time work would decline by about 22 percent compared to retirements under the current benefit formula. If the current system were replaced completely by personal accounts, the fraction at full time work would decline by about a third. If all benefits from personal accounts could be taken as a lump sum, the fraction not retired at age 62 would fall by about 5 percentage points compared to a system where there is mandatory annuitization of benefits. Unless annuitization is mandatory, there would be substantial diversion of benefits to age 62, reducing benefits received in one s 70s and 80s by 20 percent or more. %B Michigan Retirement Research Center Publication %I Michigan Retirement Research Center, University of Michigan %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/pubs/retirement-saving-benefit-claiming-and-solvency-under-a-partial-system-of-voluntary-personal-accounts-2/ %L wp_2006/MRRCwp121.pdf %4 Retirement Saving/Social Security/Annuities %$ 16450 %0 Report %D 2005 %T Social Security and Retirement Dynamics %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Social Security %X This paper is based on a structural model of retirement and saving, estimated with data for a sample of married men in the Health and Retirement Study. It explains the relation of specific features of Social Security -- the benefit amount, the early entitlement age, the normal retirement age, earnings test parameters, and the delayed retirement credit -- to the full range of retirement outcomes -- continued work on the main job, full time work outside the main job after a period of partial or full retirement, as well as partial retirement and full retirement. The project also estimates the relation of Social Security to the flows among these states. We consider not only the effect of Social Security on movement from states of greater to lesser work, the probability of either moving from full time work to partial retirement or directly to full retirement, or from partial retirement to full retirement, but the reverse flows from states of lesser work to states of greater work. The largest effects of the policies examined are from increasing the early entitlement age from 62 to 64 and reducing benefits to 75 percent of their promised levels, the approximate amount benefits would have to be reduced when the trust fund runs out if there are no changes in funding. With the older early entitlement age, about 5 percent more of the population continues to work full time at their main job at 62 and 63 than would otherwise. In addition, another 4.5 percent of the male population works full time after having retired, as does another 4 percent at age 63. Partial retirement is reduced at ages 62 and 63 by about 3 percentage points when the early entitlement age is 64. Overall, complete retirements are about 6 percentage points lower at 62 and 63 when the early retirement age is higher. From age 64 on, the percent completely retired is about two percentage points lower in each year when the early entitlement age is 64 rather than 62. The effects of reducing promised Social Security benefits by about a quarter are also large. The probability of remaining on the main job is higher for those in their sixties, with the difference ranging from 3 to 5 percentage points for those ages 62 and older. At each year of age, an additional 1 percentage point will be in full time work after having retired. There is little difference in the fraction partially retired, so the probability of being fully retired is reduced by 4 to 6 percentage points when benefits are reduced by a quarter. %B Michigan Retirement Research Center Research Project %I The University of Michigan, Michigan Retirement Research Center %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/projects/social-security-and-retirement-dynamics/ %4 Retirement Saving/Social Security %$ 16720 %0 Report %D 2005 %T Social Security and the Retirement and Savings Behavior of Low Income Households %A van der Klaauw, Wilbert %A Wolpin, Kenneth I. %K Consumption and Savings %K Social Security %X In this paper, we develop and estimate a model of retirement and savings incorporating limited borrowing, stochastic wage offers, health status and survival, social security benefits, Medicare and employer provided health insurance coverage, and intentional bequests. The model is estimated on sample of relatively poor households from the first three waves of the Health and Retirement Study (HRS), for whom we would expect social security income to be of particular importance. The estimated model is used to simulate the responses to several counterfactual experiments corresponding to changes in social security rules. These include changes in benefit levels, in the payroll tax, in the social security earnings tax and in early and normal retirement ages. %I Penn Institute for Economic Research, University of Pennsylvania %G eng %U https://papers.ssrn.com/sol3/papers.cfm?abstract_id=719982 %L wp_2005_05-020.pdf %4 Retirement Saving/Social Security %$ 15070 %0 Report %D 2005 %T Why Do Women Claim Social Security Benefits So Early? %A Alicia H. Munnell %A Soto, Mauricio %K Adult children %K Employment and Labor Force %K Social Security %K Women and Minorities %X This brief summarizes the incentives facing older women when claiming their Social Security benefits. The analysis shows that single women and married women face very different choices. For most married women, the Social Security benefit structure actually encourages them to grab their benefits as soon as possible. These incentives reinforce the tendency for wives, who are usually younger, to retire when their husbands do. Early claiming may maximize the wife's Social Security wealth, but it also encourages them to stop working, creating a loss of earnings and 401(k) savings and extending the period over which they need support in retirement. %I Boston College, Center for Retirement Research %G eng %L wp_2005/ib_35.pdf %4 Marital Status/Women/Social Security/Labor Force Participation %$ 15510 %0 Journal Article %J Gerontologist %D 2004 %T Born to retire: the foreshortened life course. %A David J Ekerdt %K Adolescent %K Adult %K Aged %K Child %K Female %K Humans %K Investments %K Life Style %K Male %K Middle Aged %K Pensions %K Retirement %K Social Security %X

Retirement is no longer a concern solely for the second half of life. Rather, the idea that we will someday retire is increasingly present to all adults and it is even urged on adolescents. The earliest reaches of adulthood are being colonized by frequent reminders that it takes individual effort to achieve retirement. The changing nature of pensions, the identification of retirement saving with financial markets, the politics of Social Security, the aging baby boom generation, and the interests of a powerful industry and of government are daily compelling people's attention to retirement as a lifelong goal. With retirement as adulthood's great project of deferred gratification, the result could be greater personal readiness to retire but also some ironic outcomes, such as a stronger retirement norm, reluctance to spend on children, and outsized expectations for later life.

%B Gerontologist %I 44 %V 44 %P 3-9 %8 2004 Feb %G eng %N 1 %L pubs_2004_Ekerdt_TG.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/14978315?dopt=Abstract %4 Retirement Behavior %$ 12572 %R 10.1093/geront/44.1.3 %0 Journal Article %J Journal of Applied Econometrics %D 2004 %T Dynamic Modeling of the SSDI Application Timing Decision: The Importance of Policy Variables %A R.V. Burkhauser %A Butler, J.S. %A Gumus, Gulcin %K Social Security %X This paper develops a dynamic programming model of the Social Security Disability Insurance (SSDI) application timing decision. We estimate the time to application from the point at which a health condition first begins to affect the kind or amount of work that a currently employed person can do. We use Health and Retirement Study (HRS) and restricted access Social Security earnings data for estimation. Our results show that the type of work-limiting health condition, presence of employer accommodation, and the relative value of income in the application state to income in the work state significantly affect the timing of SSDI application. %B Journal of Applied Econometrics %I 19 %V 19 %P 671-685 %G eng %U https://ssrn.com/abstract=475041 %N 6 %L pubs_2004_Burkhauser_etal_JAE.pdf %4 Social Security Disability Insurance %$ 13612 %0 Journal Article %J Milbank Q %D 2004 %T The effect of heavy drinking on social security old-age and survivors insurance contributions and benefits. %A Ostermann, Jan %A Frank A Sloan %K Accidents, Traffic %K Adolescent %K Adult %K Aged %K Aged, 80 and over %K Alcoholism %K Cost Sharing %K Female %K Health Behavior %K Humans %K Insurance Coverage %K Life Expectancy %K Male %K Middle Aged %K Old Age Assistance %K Social Security %K United States %X

This article estimates the effects of heavy alcohol consumption on Social Security Old-Age and Survivor Insurance (OASI) contributions and benefits. The analysis accounts for differential earnings and mortality experiences of individuals with different alcohol consumption patterns and controls for other characteristics, including smoking. Relative to moderate drinkers, heavy drinkers receive fewer OASI benefits relative to their contributions. Ironically, for each cohort of 25-year-olds, eliminating heavy drinking costs the program an additional $3 billion over the cohort's lifetime. Public health campaigns are designed to improve individual health-relevant behaviors and, in the long run, increase longevity. Therefore, if programs for the elderly are structured as longevity-independent defined benefit programs, their success will reward healthier behaviors but increase these programs' outlays and worsen their financial condition.

%B Milbank Q %I 82 %V 82 %P 507-46, table of contents %8 2004 %G eng %N 3 %1 http://www.ncbi.nlm.nih.gov/pubmed/15330975?dopt=Abstract %4 Alcohol Drinking/Social Security %$ 12382 %R 10.1111/j.0887-378X.2004.00320.x %0 Journal Article %J Journal of Labor Economics %D 2004 %T The effect of part-time work on wages: Evidence from the Social Security Rules %A Aaronson, Daniel %A Eric French %K Employment and Labor Force %K Older Adults %K Social Security %X This article identifies the part-time wage effect, using hours variation caused by the Social Security rules. We show that work hours and wages drop sharply at ages 62 and 65. We argue that the hours decline causes the wage decline, resulting in a 25 wage penalty for men who cut their work week from 40 to 20 hours. However, we find little evidence for such an effect among women. We also show that models that fail to account for the joint determination of hours and wages will understate the labor supply response to a tax change by about 26 . %B Journal of Labor Economics %I 22 %V 22 %P 329-352 %G eng %N 2 %R 10.1086/381252 %0 Thesis %D 2004 %T The Health Effects of Retirement: A Theoretical and Empirical Investigation %A Neuman, Kevin %Y Teresa Ghilarducci %K Consumption and Savings %K Disabilities %K Health Conditions and Status %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This study strives to answer the question of how retirement affects health. Assessing how retirement affects health leads to better estimates of health care costs and a better understanding of the retirement decision. The study develops a model of health investment where individuals maximize lifetime utility derived from consumption goods, leisure and healthy time and produce health using leisure and medical goods. Solving the model generates an equilibrium condition for health investment. Assuming that healthy time is a normal good, the model predicts that retirement will increase health investment and thus health for retirees in the next period relative to workers. The empirical test uses a sample of older adults from the longitudinal Health and Retirement Study. To account for the endogeneity of the retirement decision the study employs an instrumental variable model exploiting exogenous variation in Social Security and private pension benefits. The study also improves on previous work by estimating a model where health change in one period is regressed on previous period retirement status allowing the health stock time to adjust to changes in investment behavior. Using subjective health measures, the study finds that retirement decreases the probability of a good health change for men by over 8%, but increases the probability for women by 15%. The difference between sexes persists using a sample of women who worked a significant number of years in their lifetime, and is not due to the particular set of instruments used. Retirement also preserves health for both sexes, reducing the probability of a health decline by 2.5% for men and 3.5% for women. Comparing the subjective results to objective measures reduces concerns about reporting bias for the negative effects for men although the results cannot rule out role bias in the positive results for women. The results recommend leaving the Social Security early entitlement age untouched, or extending Medicare and disability coverage to those in poor health who are forced to work by entitlement age increases, potentially allowing individuals to enter retirement in better health, reducing health care costs. %I University of Notre Dame %P 163 %8 2004 %G eng %U https://search.proquest.com/openview/3b408231733694e31f1688c33ddeab28/1?cbl=18750&diss=y&pq-origsite=gscholar %9 Dissertation %4 Health Production %$ 14470 %0 Journal Article %J Applied Econometrics %D 2004 %T How Large is the Bias in Self-Reported Disability? %A Hugo Benítez-Silva %A Buchinsky, Moshe %A Hiu-Man Chan %A Sheidvasser, Sofia %A Rust, John %K Disabilities %K Methodology %K Social Security %X A pervasive concern with the use of self-reported health and disability measures in behavioral models is that they are biased and endogenous. A commonly suggested explanation is that survey respondents exaggerate the severity of health problems and incidence of disabilities in order to rationalize labor force non-participation, application for disability benefits and/or receipt of those benefits. This paper re-examines this issue using a self-reported indicator of disability status from the Health and Retirement Survey. Using a bivariate probit model we test and are unable to reject the hypothesis that the self-reported disability measure is an exogenous explanatory variable in a model of individual's decision to apply for DI benefits or Social Security Administration's decision to award benefits. We further study a subsample of individuals who applied for Disability Insurance and Supplemental Security Income benefits from the Social Security Administration (SSA) for whom we can also observe SSA's award/deny decision. For this subsample we test and are unable to reject the hypothesis that self-reported disability is health and socio-economic characteristics similar to the information used by the SSA in making its award decisions. The unbiasedness restriction implies that these two variables have the same conditional probability distributions. Thus, our results indicate that disability applicant do not exaggerate their disability status at least in anonymous surveys such as the HRS. Indeed, our results are consistent with the hypothesis that disability applicants are aware of the criteria and decision rules that SSA uses in making awards and act as if they were applying these same criteria and rules when reporting their own disability status. %B Applied Econometrics %I 19 %V 19 %P 649-670 %G eng %N 6 %L pubs_2004_B-Silva_JAE.pdf %4 Social Security/Disability/Disability/Conditional Moment Tests %$ 10362 %R 10.2307/25146315 %0 Report %D 2004 %T Minimum Hours Constraints, Job Requirements and Retirement %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Disabilities %K Employment and Labor Force %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X A structural retirement model estimated with data from the Health and Retirement Study is used to simulate the effects of policies firms might adopt to improve employment conditions for older workers and thereby encourage delayed retirement. Firm policies that effectively abolished minimum hours constraints would strongly increase the number partially retired, while reducing full time work and full retirement, resulting in only a small net increase in full time equivalent employment. Reducing physical and mental requirements of jobs would have much weaker effects on retirement than was suggested by work with the 1970s Retirement History Study. Reducing informal pressures to retire, increasing employer accommodations to health problems, and reducing the prevalence of layoffs and retirement windows would have only small effects on retirement outcomes. %B NBER Working Paper %I The National Bureau of Economic Research %C Cambridge, MA %G eng %4 Retirement/Public Policy/Economics of the Elderly/Handicapped/Nonwage Labor Costs and Benefits/Private Pensions/Social Security and Public Pensions %$ 14500 %R 10.3386/w10876 %0 Report %D 2004 %T Modeling Lifetime Earnings Paths: Hypothetical versus Actual Workers %A Olivia S. Mitchell %A John W R Phillips %A Au, Andrew %K Net Worth and Assets %K Pensions %K Social Security %X To assess the distributional effects of social security reform proposals, it is essential to have good information on real-world workers lifetime earnings trajectories. Until recently, however, policymakers have relied on hypothetical earnings profiles for policy analysis. We use actual lifetime earnings data from the Health and Retirement Study (HRS) to compare actual workers covered earnings profiles to these hypothetical profiles. We show that the hypothetical profiles do not track earnings patterns of current retirees; thus lifetime pay levels are much higher than for most HRS workers. Therefore, using hypothetical profiles could misrepresent benefits paid and taxes collected under such reforms. %I University of Pennsylvania, Boettner Center for Pe, Pension Research Council WP 2004-3 %G eng %L wp_2004/Mitchell_etal_WP2004-3.pdf %4 Pensions/Retirement Wealth/Social Security %$ 13992 %0 Report %D 2004 %T Personal Accounts and Family Retirement %A Alan L Gustman %A Thomas L. Steinmeier %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X This paper constructs a model of retirement and saving by two earner couples. The model includes three dimensions of behavior: the joint determination of retirement and saving; heterogeneity in time preference; and the interdependence of retirement decisions of husbands and wives. Estimation is based on panel data from the Health and Retirement Study covering the period 1992 to 2000. When husbands postpone their retirement so they can retire together with their typically younger wives, the spike in retirement at age 62 is smeared to later ages. Thus retirements differ between one and two earner families. We find both an asymmetry in which husbands prefer their wife to be retired before they retire, and a clear distaste of many husbands to retiring when their wives are in poor health, while the wives are willing to stay at home with sickly husbands. We simulate a system of personal Social Security accounts based on a 10.6 percent contribution rate over the lifetime. One version allows individuals to make lump sum withdrawals at retirement instead of annuitizing. This program would increase the retirement rates of husbands at age 62 by about 15 percentage points compared to the current system. Adding a lump sum option, by itself, would increase retirements at 62 by about 6 percentage points. %B NBER Working Paper %I The National Bureau of Economic Research %C Cambridge, MA %G eng %4 Retirement/Public Policy/Social Security and Public Pensions %$ 14880 %R 10.3386/w10305 %0 Report %D 2004 %T Should We Raise Social Security's Earliest Eligibility Age? %A Alicia H. Munnell %A Meme, Kevin B. %A Natalia A. Jivan %A Kevin E. Cahill %K Social Security %X Social Security’s Earliest Eligibility Age (EEA) allows one to claim reduced benefits as early as age 62. For full benefits, individuals must wait until the Normal Retirement Age (NRA), which was traditionally 65 but is gradually increasing to 67. So, Americans have a choice to make when they reach their early 60s: claim a reduced Social Security benefit right away or delay until some further date and receive a larger benefit. The reduction for claiming benefits early is designed to be actuarially fair, i.e. monthly benefits are lowered by an amount that offsets the longer period for which they will be received. The total amount that the average person can expect to receive over his or her lifetime thus does not depend on when benefits are claimed… %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/briefs/should-we-raise-social-securitys-earliest-eligibility-age/ %L pubs_2004_Munnell_etal_CRR-IB18.pdf %4 Social Security %$ 12562 %0 Journal Article %J Journal of Applied Econometrics %D 2004 %T Social Security, Pensions and Retirement Behaviour Within the Family %A Alan L Gustman %A Thomas L. Steinmeier %K Adult children %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X This paper estimates a structural model of family retirement using US data from the Health and Retirement Study (HRS). It provides further insight into household retirement decision making and the reasons for interdependence in the retirement decisions of each spouse. Improvements in HRS data and matched employer provided pension histories allow more precise identification of key parameters governing interdependent behaviour within the household. In an earlier study we found that interdependence was due to preferences rather than coordination of retirement incentives in the budget, and in particular that it is not a correlation in preferences, but the appearance of the spouse's retirement status in the husband's and wife's utility function that is largely responsible for coordination of retirement between spouses. We now find that a measure of how much each spouse values being able to spend time in retirement with the other accounts for a good portion of that apparent interdependence. For the wife, the husband's retirement status influences her retirement decision only if she values spending time in retirement with her husband. For husbands, the effect of having the wife already retired on his retirement decision is roughly doubled if he enjoys spending time in retirement with his wife, but there is some effect even if he does not. This is consistent with our earlier findings that the husband is more influenced by having a retired spouse than the wife is. The increase in the extent of the dependence of the wife's labour supply on the husband's retirement from our past work probably is traceable to better measurement of the opportunity set facing the husband in HRS data. Once estimated, we use the model to investigate the labour supply effects of alternative social security policies, examining the effect of dividing credit for earnings evenly between spouses, or of basing social security benefits on the amounts accumulated in private accounts. Both policies change the relative importance of spouse and survivor social security benefits within the household and both raise the relative reward to work later in the life cycle. The incentives created are modest, and retirement responds accordingly. Nevertheless, at some ages, such as 65, there may be as much as a 6 increase in the old age work force under privatized accounts. Copyright 2004 John Wiley and Sons, Ltd. %B Journal of Applied Econometrics %I 19 %V 19 %P 723-737 %G eng %N 6 %L pubs_2004_Gustman-Steinmeier_JAE.pdf %4 Retirement Behavior/Social Security/Pensions/Family %$ 6633 %R https://doi.org/10.1002/jae.753 %0 Report %D 2004 %T Understanding Patterns of Social Security Benefit Receipt, Pensions Incomes, Retirement and Saving by Race, Ethnicity, Gender and Marital Status: A Structural Approach %A Alan L Gustman %A Thomas L. Steinmeier %K ethnicity %K gender %K pension incomes %K race %K Retirement %K Social Security %K Social Security Benefits %X In this paper we use data from the Health and Retirement Study to examine differences in retirement behavior, wealth, Social Security and pension benefits by race and gender. The differences observed among groups are sometimes substantial. We then estimate models jointly explaining retirement and wealth by race and gender. We decompose differences in outcomes into those due to differences in parameters of the preference function for leisure and goods, time preference rates, and those due to differences in the circumstances of the members of each group. By circumstances we mean both the opportunity set, and factors that determine the disutility of continued work, such as health status. We find that differences in outcomes among white, black and Hispanic males are not due to differences in preferences for leisure and goods consumption, but are due both to differences in time preference and to differences in circumstances. Differences in outcomes between men and women are primarily due to differences in preferences. Authors’ Acknowledgement This paper was supported by a grant from the U.S. Social Security Administration (SSA) to the Michigan Retirement Research Center, UM 03-13. The opinions and conclusions are solely those of the authors and should not be construed as representing the opinions or policy of SSA, the Michigan Retirement Research Center, or the National Bureau of Economic Research. Alan L. Gustman is Loren Berry Professor of Economics at Dartmouth College, Department of Economics, Hanover, N.H. 03755 (alan.l.gustman@dartmouth.edu). Thomas L. Steinmeier is Professor of Economics, Texas Tech University, Department of Economics, Lubbock, Texas 79409 (Thomas.Steinmeier@TTU.edu). %B Michigan Retirement Research Center Research Project %I Michigan Retirement Research Center %C Ann Arbor, MI %G eng %U https://mrdrc.isr.umich.edu/projects/understanding-patterns-of-social-security-benefit-receipt-pensions-incomes-retirement-and-saving-by-race-ethnicity-gender-and-marital-status-a-structured-approach/ %0 Report %D 2003 %T Annuities and Retirement Satisfaction %A Panis, Constantijn %K Expectations %K Net Worth and Assets %K Retirement Planning and Satisfaction %K Social Security %X This paper analyzes pre-retirement expectations and post-retirement satisfaction, in particular their association with the degree to which retirees financial resources are in the form of annuities. Using the 1992-2000 Health and Retirement Study (HRS), we find that most retirees are very satisfied with their overall situation, but the degree of satisfaction varies substantially with retirees characteristics. In particular, people in better health and with more financial resources tend to be more satisfied. Holding constant the present value of retirement resources and other factors, we find that retirees who can finance more of their consumption in retirement from pension annuities (vs. Social Security benefits and accumulated savings) are more satisfied. Retirees with lifelong annuities also tend to maintain their level of satisfaction during retirement, whereas those without tend to become less satisfied over time. We find the very same patterns with alternative depression-related measures of well-being in retirement. The findings have important implications for the well-being of future American retirees, who are increasingly reliant on DC pension plans rather than traditional DB. %B RAND Unrestricted Draft %I RAND Corporation %C Santa Monica, CA %G eng %U https://www.rand.org/pubs/drafts/DRU3021.html %4 Retirement Expectations/Retirement Wealth/Satisfaction %$ 10472 %0 Report %D 2003 %T Baby Boomers' Retirement Prospects: An Overview %A United States Congressional Office %K Demographics %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Having enjoyed historically high incomes over their working years, baby boomers (people born from 1946 to 1964) make up one of the most prosperous generations in U.S. history. In the past 15 years, however, their finances have become a source of concern in policy circles and in the press as doubts have arisen about whether boomers are accumulating enough wealth to maintain their current or expected standards of living after they retire.1 One worry is that low saving by boomers could hurt the economy by limiting the growth of investment, productivity, and wages. Such curbs on economic activity could compound the budgetary pressures that the federal government will face as increasing numbers of boomers become eligible for benefits from Social Security and Medicare. %B A CBO Study %I Congressional Budget Office %C Washington, D.C. %G eng %U https://www.cbo.gov/sites/default/files/108th-congress-2003-2004/reports/11-26-babyboomers.pdf %4 retirement planning/social Security/Public Policy/early boomers %$ 13694 %0 Journal Article %J Social Work Research %D 2003 %T The Effect of Health on Retirement Saving Among Older Workers %A Lum, Y.S. %A Lightfoot, Elizabeth %K Consumption and Savings %K Health Conditions and Status %K Pensions %K Social Security %X Using data from the first wave of the Health and Retirement Study, the authors investigated the association between health and retirement saving. The two most important findings were that (1) health has a large, significant effect on both the probability that a person nearing retirement age will contribute to an IRA and the amount of money that a person Will hold in IRAs, and (2) a spouse's health has a large, significant effect on a person's access to an employer-sponsored pension, the probability that a person will contribute to an IRA, and the amount of money held in an IRA. %B Social Work Research %I 27 %V 27 %P 31-44 %G eng %N 1 %L pubs_2003_Lum_SWR.pdf %4 Health/Retirement Saving/Pensions/Social Security %$ 11872 %0 Report %D 2003 %T Employment, Social Security, and Future Retirement Outcomes for Single Mothers %A Richard W. Johnson %A Melissa Favreault %A Joshua H. Goldwyn %K Expectations %K Social Security %K Women and Minorities %I Chestnut Hill, MA, Center for Retirement Research at Boston College %G eng %4 Social Security/Women, Working/Retirement Expectations %$ 13352 %0 Report %D 2003 %T Fiscal Effects of Social Security Reform in the United States %A Courtney Coile %A Gruber, Jonathan %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Social Security is the largest social insurance program in the U.S., and has been shown to be a major determinant of the labor supply decisions of older workers. As such, reforming the Social Security system can have two fiscal impacts: a mechanical effect through changing the rules on benefits entitlements or taxation, and a behavioral effect through individual responses to these changes in benefits or taxes. We build a simulation model that computes these effects for major reforms to the system, building on estimated retirement responses to changing net Social Security entitlements. We then estimate the fiscal impact of reform for the 1931-1941 cohort of workers represented by the Health and Retirement Survey. We find that raising the early and normal retirement age by three years would reduce net costs for this cohort by roughly 30 , and that moving to a much higher benefit level would raise net costs by roughly 55 . Importantly, we find that in both cases the behavioral impacts on net costs are relatively small, at most one-third, and generally less than one-fifth of the total. The reason for these small effects is that the U.S. Social Security system is roughly actuarially fair, so that delaying or inducing retirement has relatively little impact on system balances; most of the effects that do arise are due to changes in general income and consumption taxes. %B Center for Retirement Research at Boston College Working Papers %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/working-papers/fiscal-effects-of-social-security-reform-in-the-united-states/ %L wp_2003/Coile-Gruber2003-05.pdf %4 Retirement Behavior/Public Policy/Social Security %$ 10212 %0 Report %D 2003 %T How Large Are the Classification Errors in the Social Security Disability Award Process? %A Hugo Benítez-Silva %A Buchinsky, Moshe %A Rust, John %K Disabilities %K Methodology %K Social Security %X This paper presents an audit of the multistage application and appeal process that the U.S. Social Security Administration (SSA) uses to determine eligibility for disability benefits of the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. We study a subset of individuals from the Health and Retirement Survey (HRS) who applied for DI or SSI benefits between 1992 and 1996. We compare the SSA s ultimate award decision a (i.e., after allowing for all possible appeals) to the applicant s self-reported disability status d (recorded at the first HRS survey after their initial application for benefits). We use these data to estimate classification error rates under the hypothesis that applicants self-reported disability status d is the relevant measure of true disability and the SSA s ultimate award decision a is a noisy but unbiased indicator of d This truthful, accurate reporting hypothesis allows us to estimate the magnitude of classification errors in the SSA award process and obtain insights into the patterns of self-selection induced by varying delays and award probabilities at various levels of the application and appeal process. Overall we find that 22 of SSI/DI applicants who are ultimately awarded benefits are not disabled, and that 59 of applicants who were denied benefits are disabled. We construct a computerized disability screening rule using a subset of objective health indicators that the SSA uses in making award decisions that results in significantly lower classification error rates than does SSA s current award process. This suggests that there may be cheaper, faster, and more accurate ways to make disability determinations than the SSA s current disability award process. We also estimate classification errors under the assumption that both a and d are noisy but unbiased indicators of an (unobserved) underlying indicator of true disability, t . However, the estimated classification error rates remain virtually unchanged under this alternative hypothesis. %I SUNY-Stony Brook %G eng %U http://ms.cc.sunysb.edu/ hbenitezsilv/dice.pdf %L wp_2003/B-Silva_etal.pdf %4 Social Security/Disability/Disability/Classification errors %$ 10382 %0 Report %D 2003 %T Impact of the Social Security Retirement Earnings Test on 62-64 Year-olds %A Ratcliffe, Caroline %A Berk, Jillian %A Perese, Kevin %A Toder, Eric %K Social Security %B Public Policy Institute %I The Urban Institute %C Washington, D.C. %G eng %4 Social Security/Earnings and Benefits File %$ 14222 %R http://dx.doi.org/10.2139/ssrn.2206445 %0 Report %D 2003 %T Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing %A R.V. Burkhauser %A Butler, J.S. %A Gumus, Gulcin %K disability insurance %K Social Security %X This paper develops dynamic structural models - an option value model and a dynamic programming model - of the Social Security Disability Insurance (SSDI) application timing decision. We estimate the time to application from the point at which a health condition first begins to affect the kind or amount of work that a currently employed person can do. We use Health and Retirement Study (HRS) and restricted access Social Security earnings data for estimation. Based on tests of both in-sample and out-of-sample predictive accuracy, our option value model performs better than both our dynamic programming model and our reduced form hazard model. %I Institute for the Study of Labor (IZA) %C Bonn, Germany %G eng %U https://www.iza.org/publications/dp/941/option-value-and-dynamic-programming-model-estimates-of-social-security-disability-insurance-application-timing %L wp_2003/Burkhauser_etal_IZAdp941.pdf %4 Social Security Disability Insurance %$ 13602 %0 Journal Article %J Journal of Economic Perspectives %D 2003 %T Perspectives from the President’s Commission on Social Security Reform %A John F. Cogan %A Olivia S. Mitchell %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %K Taxes %X Social Security faces a severe financial problem. In about 15 years, the program will begin to experience permanent annual cash deficits, when annual benefit payments will exceed the amount collected in payroll tax revenues. By 2041, according to the Social Security Trustees 2002 Report, the Social Security trust fund is projected to be insolvent, meaning that the program will be legally unable to pay scheduled benefits. One way of expressing the financial shortfall is to compute the present value of the difference between system outlays and revenues over a 75-year horizon, which is currently equal to a permanent and immediate tax rate increase of 1.86 percent of payroll, or equivalent to $3.2 trillion in present value. If the policy of pay-as-you-go financing is continued for the next 25 years, a 50 percent payroll tax increase will be required at that time to pay scheduled benefits. %B Journal of Economic Perspectives %V 17 %P 149-172 %G eng %U https://web.stanford.edu/class/econ21si/coganmitchell_prescommission.pdf %N 2 %& 149 %0 Report %D 2003 %T Retirement Effects of Proposals by the President's Commision to Strengthen Social Security %A Alan L Gustman %A Thomas L. Steinmeier %K Retirement %K Social Security %X A structural dynamic model of retirement and saving is used to simulate the retirement effects of proposals made by the President's Commission to Strengthen Social Security. Provisions reducing the growth in real benefits and increasing actuarial incentives to work reduce retirements. They more than offset increases in retirements caused by individual accounts, increased benefits for low wage workers and survivors, and reductions in the top AIME bracket. By 2075, the Commission's proposals would reduce retirements at age 62 by roughly 4 percentage points, mitigating an 8.7 percentage point trend to earlier retirement projected to reassert itself after its recent interruption. %B National Bureau of Economic Research Working Paper Series %I The National Bureau of Economic Research %C Cambridge, MA %V No. 10030 %G eng %U http://www.nber.org/papers/w10030 %0 Report %D 2003 %T Retirement Wealth and Lifetime Earnings Variability %A Olivia S. Mitchell %A John W R Phillips %A Au, Andrew %A McCarthy, David %K Net Worth and Assets %K Social Security %X This paper explores understand how earnings variability influences peoples’ retirement preparedness by influencing their accumulated wealth levels as of retirement age. Prior research has demonstrated that the US average household nearing retirement would need to save substantially more in order to preserve consumption in old age. While some socioeconomic factors have been suggested that might explain shortfalls, previous studies have not assessed the role of earnings variability over the lifetime as a potential explanation for poor retirement prospects. Thus two workers having identical levels of average lifetime earnings might have had very different patterns of earnings variability over their lifetimes. Such differences could translate into quite different retirement wealth outcomes. We evaluate the effect of earnings variability on retirement wealth using information supplied by respondents to the Health and Retirement Study (HRS). This is a rich and nationally representative dataset on Americans on the verge of retirement, with responses linked to administrative records from the Social Security Administration. Our research illuminates key links between lifetime earnings variability and retirement wealth. %B Pension Research Council Publications %I University of Pennsylvania, Wharton School %C Philadelphia %G eng %U https://pensionresearchcouncil.wharton.upenn.edu/publications/papers-2018/retirement-wealth-and-lifetime-earnings-variability/ %L wp_2003/Mitchell_etal.pdf %4 Retirement Wealth/Earnings and Benefits File %$ 11582 %0 Book Section %B Public Policies and Private Pensions %D 2003 %T What People Don't Know About Their Pensions and Social Security: An Analysis Using Linked Data from the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %E William G. Gale %E John B. Shoven %E Mark J. Warshawsky %K Consumption and Savings %K Employment and Labor Force %K Income %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Pension plan descriptions from respondents to the 1992 Health and Retirement Study are compared with descriptions obtained from their employers. Earnings histories reported by respondents are compared with earnings histories from the Social Security Administration. The probability of linking employer pension data, which is two thirds for current jobs, and of obtaining permission to link an earnings history, which is over 70 percent, are not well explained by respondent characteristics. Half of respondents with linked pension data correctly identify plan type, and fewer than half identify, within one year, dates of eligibility for early and normal retirement benefits. Benefit reduction rates are essentially not reported. Respondents do better in reporting pension values, but the unexplained variation is still considerable. In contrast, respondent reported values together with other observables, account for 80 percent of the variation in pension values and 75 percent of the variation in covered earnings measured from linked records. Thus prospects are good for imputing plan values, but not for imputing the location or size of early retirement incentives. Our findings raise questions about how well respondents understand complex pension and Social Security rules. %B Public Policies and Private Pensions %I Brookings Institution %C Washington, DC %P 57-125 %G eng %U https://www.nber.org/papers/w7368 %4 Personal Income and Wealth Distribution/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Nonwage Labor Costs and Benefits/Private Pensions/Pension/Social Security/Retirement/Income Distribution/Nonwage Benefits %$ 1116 %+ National Bureau of Economic Research Working Paper 7368. Copies available from: National Bureau of Economic Research, 1050 Massachusetts Avenue, Cambridge, MA 02138. Website: www.nber.org %0 Journal Article %J J Health Econ %D 2002 %T Breast cancer survival, work, and earnings. %A Cathy J. Bradley %A Bednarek, Heather %A David Neumark %K Breast Neoplasms %K Cohort Studies %K Diagnostic Tests, Routine %K Efficiency %K Employment %K Female %K Humans %K Longitudinal Studies %K Mammography %K Middle Aged %K Models, Econometric %K Probability %K Research Design %K Retirement %K Salaries and Fringe Benefits %K Social Security %K Survivors %K United States %K Women, Working %X

Relying on data from the Health and Retirement Study (HRS) linked to longitudinal social security earnings data, we examine differences between breast cancer survivors and a non-cancer control group in employment, hours worked, wages, and earnings. Overall, breast cancer has a negative impact on employment. However, among survivors who work, hours of work, wages, and earnings are higher compared to women in the control group. We explore possible biases underlying these estimates, focusing on selection, but cannot rule out a causal interpretation. Our research points to heterogeneous labor market responses to breast cancer, and shows that breast cancer does not appear to be debilitating for women who remain in the work force.

%B J Health Econ %I 21 %V 21 %P 757-79 %8 2002 Sep %G eng %N 5 %L pubs_2002_Bradley_CJHE.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/12349881?dopt=Abstract %4 Breast Neoplasms/Economics/Mortality/Radiography/Cohort Studies/Diagnostic Tests, Routine/Efficiency/Employment/Economics/Statistics and Numerical Data/Female/Human/Longitudinal Studies/Mammography/Utilization/Middle Age/Models, Econometric/Probability/Research Design/Retirement/Salaries and Fringe Benefits/Statistics and Numerical Data/Social Security/Support, U.S. Government--PHS/Survivors/Statistics and Numerical Data/United States/Epidemiology/Women, Working/Statistics and Numerical Data %$ 4030 %R 10.1016/s0167-6296(02)00059-0 %0 Journal Article %J Journal of Public Economics %D 2002 %T Delays in Claiming Social Security Benefits %A Courtney Coile %A Diamond, Peter %A Gruber, Jonathan %A Jousten, Alain %K Retirement Planning and Satisfaction %K Social Security %X This paper focuses on Social Security benefit claiming behavior, a take-up decision that has been ignored in the previous literature. Using financial calculations and simulations based on an expected utility maximization model, we show that delaying benefit claim for a period of time after retirement is optimal in a wide variety of cases and that gains from delay may be significant. We find that approximately 10 of men retiring before their 62nd birthday delay claiming for at least one year after eligibility. We estimate hazard and probit models using data from the New Beneficiary Data System to test four cross-sectional predictions. While the data suggest that too few men delay, we find that the pattern of delays by early retirees is generally consistent with the hypotheses generated by our theoretical model. %B Journal of Public Economics %I 84 %V 84 %P 357-385 %G eng %U http://econ-www.mit.edu/faculty/pdiamond/files/claim14.pdf %N 3 %L pubs_2002_Coile_CJPuEc.pdf %4 Social Security benefit claiming/Claiming behavior/Claiming behavior/retirement planning %$ 11752 %0 Thesis %D 2002 %T Dynamic Models of the Social Security Disability Insurance Application %A Gumus, Gulcin %K Healthcare %K Social Security %X This dissertation develops dynamic structural models--option value and dynamic programming models of the Social Security Disability Insurance (SSDI) application decision. In the first chapter, we estimate the time to application following the onset of a health condition that first begins to affect the kind or amount of work that a currently employed person can do. We use the Health and Retirement Study (HRS) augmented by linked restricted access Social Security earnings record data. We test both the in-sample and out-of-sample predictive accuracy of our models using multinomial likelihood ratio tests based on discrete periods. Based on their predictive validity, we find that our option value model is superior to both our dynamic programming model and our reduced form hazard model. We also investigate the robustness of the results by only including individuals for whom restricted access Social Security earnings record data are available in our sample. These results are virtually the same as the ones for the full sample. In the second chapter, we use the preferred option value model estimates from the first chapter to simulate application timing under alternative SSDI policies. Three types of disability policy reforms are simulated: changing the benefit amounts, changing program eligibility stringency by changing the acceptance rates, and extending employer accommodation to all individuals with work limiting health conditions. Our simulations suggest all three of these policy changes would have substantial effects on lifetime application rates and on expected spell lengths until application for SSDI, and hence on SSDI caseloads. %I Cornell University %8 2002 %G eng %4 Social Security Disability Insurance %$ 12782 %! Dynamic Models of the Social Security Disability Insurance Application %0 Generic %D 2002 %T An evaluation of the retirement questions in the Health and Retirement Study %A Courtney Coile %A Gruber, Jonathan %K Health Insurance %K Pensions %K Retirement %K Social Security %I National Institute on Aging %C Bethesda, MD %0 Book Section %B Social Security and the Family: Addressing Unmet Needs in an Underfunded System %D 2002 %T The Family, Social Security, and the Retirement Decision %A Melissa Favreault %A Richard W. Johnson %E Melissa Favreault %E Sammartino, F. %E Steuerle, C. Eugene %K Adult children %K Social Security %B Social Security and the Family: Addressing Unmet Needs in an Underfunded System %I The Urban Institute Press %C Washington, DC %P 295-329 %G eng %4 Social Security/Family transfers, structure %$ 8660 %! The Family, Social Security, and the Retirement Decision %0 Book Section %B The Distributional Aspects of Social Security and Social Security Reform %D 2002 %T Guaranteed Income: SSI and the Well-Being of the Elderly Poor %A Kathleen McGarry %E Feldstein, Martin %E Jeffrey B Liebman %K Demographics %K Methodology %K Public Policy %K Social Security %X It is a well known fact that over the past 40 years Social Security has made a major contribution to reducing the poverty levels of elderly persons. At the same time people are beginning to realize the decline in labor force participation of the near-elderly. This paper examines these two topics, as well as, the elderly population that is not being provided sufficient Social Security compensation. Within this context the authors discuss possible changes in Supplemental Security Income, the elimination of the asset test, increasing unearned income disregards, raising guarantees to the poverty line, using social security income, costs of changes, and the effects on poverty. %B The Distributional Aspects of Social Security and Social Security Reform %I University of Chicago Press %C Chicago %G eng %U https://www.nber.org/papers/w7574 %4 Elderly/Low Income Groups/Social Security Research/Supplemental Security Income/Public Policy %$ 8532 %! Guaranteed Income: SSI and the Well-Being of the Elderly Poor %0 Journal Article %J Social Security Bulletin %D 2002 %T How Policy Variables Influence the Timing of Social Security Disability Insurance Applications %A R.V. Burkhauser %A Butler, J.S. %A Robert R. Weathers II %K Disabilities %K Social Security %X This article analyzes the impact of policy variables—employer accommodations, state Social Security Disability Insurance (DI) allowance rates, and DI benefits— on the timing of an application for DI benefits by workers with a work-limiting health condition starting when their health condition first begins to bother them. The analysis uses a rich mixture of personal and employer characteristics from the Health and Retirement Study linked to Social Security administrative records. %B Social Security Bulletin %I 64 %V 64 %P 52-83 %G eng %U https://www.ssa.gov/policy/docs/ssb/v64n1/v64n1p52.pdf %N 1 %4 Social Security/Disability/Disability %$ 10232 %0 Report %D 2002 %T Modeling Income in the Near Term: Revised Projections of Retirement Income Through 2020 for the 1931-1960 Birth Cohorts %A Toder, Eric %A Thompson, Lawrence H. %A Melissa Favreault %A Richard W. Johnson %A Perese, Kevin %A Ratcliffe, Caroline %A Karen E. Smith %A Cori E. Uccello %A Timothy A Waidmann %A Berk, Jillian %A Woldemariam, Romina %A Gary T. Burtless %A Claudia R Sahm %A Douglas A. Wolf %K Disabilities %K Net Worth and Assets %K Pensions %K Social Security %X The Division of Policy Evaluation (DPE) of the Social Security Administration (SSA) has entered into two contracts with the Urban Institute to help it develop a new tool for analyzing the distributional consequences of Social Security reform proposals. The first, awarded in 1998, led to the development of Modeling Income in the Near Term (MINT), a tool for simulating the retirement incomes of members of the Baby Boom and neighboring cohorts. The second, awarded in 2000, was to expand and improve on the first version of MINT. In all phases of the project, members of the research staff at SSA/DPE collaborated closely with the contractors. The Brookings Institution served as a subcontractor to the Urban Institute under both contracts and the RAND Corporation participated in the development of the initial version of MINT under a separate contract. This report describes the work of the researchers at Urban and Brookings under the second contract. %B Urban Institute Research Report %I The Urban Institute %C Washington, D.C. %G eng %U http://www.urban.org/UploadedPDF/410609_ModelingIncome.pdf %L wp_2002/Toder_etal_ModelingIncome.pdf %4 Earnings and Benefits File/Disability/Disability/Pensions/Wealth %$ 14212 %0 Report %D 2002 %T Perceived Future Social Security Generosity: An Empirical Welfare Test %A Van Wesep, Edward P. %K Adult children %K Public Policy %K Social Security %I Western Michigan University %G eng %4 Intergenerational equity/Social Security/Welfare %$ 6628 %0 Report %D 2002 %T The Value of the Medicare Benefit for Social Security Disability Insurance Recipients and Applicants %A Bhattacharya, Jay %A Michael Schoenbaum %K Disabilities %K Medicare/Medicaid/Health Insurance %K Social Security %I RAND Corporation %C Santa Monica, CA %G eng %4 Medicare/Disability/Disability/Social Security %$ 6623 %0 Journal Article %J The Gerontologist %D 2002 %T Workers' Ignorance of Retirement Benefits %A David J Ekerdt %A Kyle J Hackney %K Demographics %K Education %K Medicare/Medicaid/Health Insurance %K Methodology %K Other %K Pensions %K Social Security %X PURPOSE: This study considered the extent of workers' unfamiliarity with retirement benefits, a problem that could compromise informed retirement planning. DESIGN AND METHODS: Among workers in the 1992 Health and Retirement Study, we examined the frequency of don't know responses to question series about employer pensions, health insurance, and Social Security. RESULTS: Eligible workers readily offered responses about the shared, public details of pension plans, but knowledge about personal pension wealth was lacking for one third of persons in defined benefit plans and for one fifth of those in defined contribution plans. Among household financial respondents, 14 did not know about health insurance continuation after retirement, and 52 could not offer an expected Social Security amount. Such nonresponse was patterned by proximity to retirement and by social and occupational factors. IMPLICATIONS: More than a problem of missing data, these findings argue for a theoretical reconsideration of the role of financial knowledge in retirement behavior. Ignorance of benefits is probably less a problem of disclosure than of workers' inattention to available information. %B The Gerontologist %I 42 %V 42 %P 543-51 %G eng %N 4 %4 Female/Human/Insurance, Health/Knowledge/Middle Age/Pensions/Social Security/Support, U.S. Government--PHS/United States %$ 4450 %R 10.1093/geront/42.4.543 %0 Report %D 2002 %T Workers Who Take Early Social Security Retirement Benefits %A Julie M Zissimopoulos %A Panis, Constantijn %A Michael D Hurd %K Retirement Planning and Satisfaction %K Social Security %X The objectives of this analysis are to shed light on the differences between workers who take early Social Security retirement benefits and those that postpone claiming, and to identify the types of individuals that would be particularly vulnerable to an increase in the Early Entitlement Age (EEA) above its current level of age 62. Generally speaking, we find workers who accept early retirement benefits are less likely to be college educated, less likely to be in management positions or to be professionals and more likely to have left the labor force before age 62. There are no large differences in financial wealth between Takers and Postponers, except for in pension wealth. Takers are much less likely to be covered by a pension plan and have lower pension wealth than Postponers. Moreover, while quite healthy on average, Takers are more likely to be in poorer health than workers who postpone benefits. This difference is particularly important for understanding the impact of raising the EEA. Individuals with a limited ability to continue working past age 62 due to health problems may experience substantial welfare losses in case of an increase in the EEA. Among a particularly vulnerable group of Takers, those in poor health and without pension entitlement, we find that more than half have a physically demanding job. These workers are particularly likely to apply for DI benefits in case of an increase of the EEA, which would add to rather than reduce total Social Security outlays. %I Washington, DC, RAND Labor and Population Program; Prepared for the Social Security Administration %G eng %4 Retirement Planning/Early Retirement/Social Security %$ 9872 %0 Report %D 2001 %T Breast Cancer Survival, Work, and Earnings %A Cathy J. Bradley %A Bednarek, Heather %A David Neumark %K Demographics %K Employment and Labor Force %K Health Conditions and Status %K Healthcare %K Medicare/Medicaid/Health Insurance %K Methodology %K Other %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Relying on data from the Health and Retirement Study, we examine differences between breast cancer survivors and a non-cancer control group in employment, hours worked, wages, and earnings. Overall, breast cancer has a negative impact on the decision to work. However, among survivors who work, hours of work and, correspondingly, annual earnings are higher compared to women in the non-cancer control group. These findings suggest that while breast cancer has a negative effect on women's employment, breast cancer may not be debilitating for those who remain in the work force. We explore numerous possible biases underlying our estimates especially selection based on information in the Health and Retirement Study, and examine related evidence from supplemental data sources. %B NBER Working Paper %I The National Bureau of Economic Research %C Cambridge, MA %G eng %4 Breast Neoplasms/Economics/Mortality/Radiography/Cohort Studies/Diagnostic Tests, Routine/Efficiency/Employment/Economics/Statistics and Numerical Data/Female/Human/Longitudinal Studies/Mammography/Utilization/Middle Age/Models, Econometric/Probability/Research Design/Retirement/Salaries and Fringe Benefits/Statistics and Numerical Data/Social Security/Support, U.S. Government--PHS/Survivors/Statistics and Numerical Data/United States/Epidemiology/Women, Working/Statistics and Numerical Data %$ 6598 %R 10.3386/w8134 %0 Journal Article %J The Milbank Quarterly %D 2001 %T Effects of Alcohol Consumption on Disability Among the Near Elderly: A Longitudinal Analysis %A Ostermann, Jan %A Frank A Sloan %K Disabilities %K Health Conditions and Status %K Net Worth and Assets %K Social Security %X In this study the 1992, 1994, 1996, and 1998 waves of the Health and Retirement Study were used as a way to ascertain the validity of government policy changes in transfer benefits based on alcohol consumption and disability. Are heavy drinkers more likely than abstainers or moderate drinkers to be disabled and receiving transfers from SSDI or SSI? (cross-sectional analysis). How have the 1996 policy revisions changed the amount of government transfers given to the disabled who consume alcohol and the ease in receiving such receipts? (longitudinal analysis). The authors discuss many ways in which alcohol use may effect a persons body and ability to complete tasks, as well as, some ways in which preferences toward alcohol consumption can affect ones economic and financial decisions. At wave 4 in 1998 they find there is a strong correlation between rates of disability and the drinking behavior/history of drinking problems reported in Wave 1 of 1992. However, moderate drinkers were the least likely to be disabled in 1998 and the abstainers were the most likely. At the same time though, those that reported being heavy drinkers, had the most limitations on their abilities and were the most likely to be receiving SSDI or SSI transfers. The odds of death between two years (time interval between waves) was insignificant, but those who drank heavily reported more limitations at each subsequent wave. The change in policy had practically no effect on number of people collecting SSDI/SSI. Heavy and problem drinkers were less numerous among those receiving SSDI/SSI after the policy changes, but the data in this study were unable to pinpoint the specific reasons for this outcome. %B The Milbank Quarterly %I 79 %V 79 %P 487-515 %G eng %N 4 %L pubs_2001_Ostermann_JMiliQuart.pdf %4 Health Behaviors/Health Status/Economic Status/Alcohol Drinking/Supplemental Security Income/Disability/Disability %$ 8542 %0 Report %D 2001 %T Eligibility for Social Security Disability Insurance %A Olivia S. Mitchell %A John W R Phillips %K Disabilities %K Insurance %K Social Security %I Philadephia, PA, University of Pennsylvania, The Wharton School %G eng %U http://prc/wharton.upenn.edu/prc/prc.html %L wp_2001/Mitchell-Phillips_PRCwp2001-11.pdf %4 Social Security/Insurance/Disability/Disability %$ 6613 %0 Report %D 2001 %T Evaluation of Social Security reforms under alternative models of retirement and savings %A Aguirregabiria, Victor %K Methodology %K Social Security %I University of Western Ontario %G eng %4 Models, Econometric/Social Security %$ 6543 %0 Journal Article %J Journal of Public Economics %D 2001 %T How Effective is Redistribution Under the Social Security Benefit Formula? %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Income %K Retirement Planning and Satisfaction %K Social Security %X In this study, data from the Health and Retirement Study linked to the Social Security Administration is used in order to analyze wealth redistribution by way of Social Security. This redistribution seems to go from the upper earners to the lower earners. More specifically, the wealth is being redistributed from men to women and, when looking at the household context, from primary earners to secondary earners. The study also illustrates wealth redistribution when specific factors are taken into account and show how much of an effect different variables have on the redistribution of wealth. From their analysis the authors conclude that privatizing the Social Security system would have no effect on redistribution of wealth. %B Journal of Public Economics %I 82 %V 82 %P 1-28 %G eng %N 1 %L pubs_2000_Gustman_AJPuEc.pdf %4 Personal Income and Wealth Distribution/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Social Security/Income Redistribution/Retirement %$ 8412 %0 Report %D 2001 %T Modeling Behavioral Responses to Changes in Social Security: A Life-Cycle Framework %A Rust, John %K Event History/Life Cycle %K Social Security %X The life cycle model can be used to provide detailed predictions of the behavioral responses to wide range of hypothetical changes in Social Security policy. I provide a concrete illustration of how this is done by using a preliminary calibrated version of the life cycle model to predict the behavioral responses of a change in the Social Security Disability Insurance (SSDI) program known internally within the Social Security Administration as the 1 for 2 benefit offset proposal . %I University of Maryland %G eng %4 Life Cycle Models/Social Security Disability Insurance %$ 10442 %0 Report %D 2001 %T Modeling Retirement Behavior: A Test of the Option-Value Model Using the Health and Retirement Study %A Harris, Amy Rehder %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X This study outlines a latent variable model for consistently estimating the effects of health and other characteristics on the labor force transitions of older, working-aged adults. This model deals explicitly with both the potential endogeneity of global self-reported health measures and with the measurement error inherent in quantifying health status. We estimate the model using the longitudinal Health and Retirement Study and evaluate its properties by testing its underlying assumptions. We intend our results to inform work that uses the kinds of latent variable models we have been using in our own research as well as other research using the health variables available on the HRS. %I Congressional Budget Office %G eng %4 Social Security/Pensions/Retirement Behavior %$ 9982 %0 Journal Article %J Monthly Labor Review %D 2001 %T Pension Integration and Retirement Benefits %A Bender, Keith A. %K Pensions %K Social Security %X This paper investigates the outcomes associated with retirement plans, defined-benefit or defined-contribution, that take Social Security benefits into account. In 1995, just over half of the defined-benefit plans took Social Security benefits into account when calculating future retirement income. Excess-rate and offset integrated plans have major differences that makes it necessary to examine their effects on replacement rates of integrated pension plans in different ways. Offset plans do not have higher rates of replacement than excess-rate plans as is commonly believed. At low tenure levels offset plans have higher replacement rates than those plans that are not integrated, however, at higher tenure levels the opposite is true. It is also realized that nonintegrated plans have greater replacement rates than the excess-rate plans. %B Monthly Labor Review %I Feb %V Feb %P 49-58 %G eng %U https://www.bls.gov/opub/mlr/2001/02/art3full.pdf %L pubs_1999_Bender_KSSB.pdf %4 Pension/Social Security/Pensions/Benefits %$ 8464 %0 Report %D 2001 %T Should a Lump-Sum Payment Replace Social Security's Delayed Retirement Credit? %A Orszag, Peter R. %K Retirement Planning and Satisfaction %K Social Security %X Transforming Social Security’s delayed retirement credit into a lump-sum payment rather than an increased monthly payment would likely encourage more workers to defer retirement and benefit claiming. The idea is thus worthy of further exploration. Several important design issues, however, must be addressed before policymakers give serious consideration to the reform. The most problematic aspect of the proposal is that implementing a lump-sum payment system for individuals older than the normal retirement age may create political pressure to extend this approach to those who are younger than the normal retirement age. Such an extension would risk a significant increase in elderly poverty rates relative to the current Social Security system… %B Center for Retirement Research at Boston College Briefs %I Boston College %C Boston %G eng %4 Social Security/Delayed Retirement %$ 8470 %R https://crr.bc.edu/briefs/should-a-lump-sum-payment-replace-social-securitys-delayed-retirement-credit/ %0 Report %D 2001 %T Social Security Expectations and Retirement Savings Decisions %A Dominitz, Jeff %A Charles F Manski %A Heinz, Jordan %K Consumption and Savings %K Social Security %X Retirement savings decisions should depend on expectations of Social Security retirement income. Persons may be uncertain of their future Social Security benefits for several reasons, including uncertainty about their future labor earnings, the formula now determining social security benefits, and the future structure of the Social Security system. To learn how Americans perceive their benefits, we have elicited Social Security expectations from respondents to the Survey of Economic Expectations. We have also performed a more intensive face-to-face survey on a small sample of respondents. This paper presents the empirical findings. It also illustrates how data on expectations may help predict how Social Security policy affects retirement savings. %B NBER Working Paper %I The National Bureau of Economic Research %C Cambridge, MA %G eng %4 Social Security expectations/Retirement Saving %$ 10862 %R https://www.nber.org/papers/w8718 %0 Journal Article %J Social Security Bulletin %D 2000 %T A Benefit of One's Own: Older Women's Entitlement to Social Security Retirement %A Phillip B. Levine %A Olivia S. Mitchell %A John W R Phillips %K Consumption and Savings %K Health Conditions and Status %K Methodology %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Using data from the Health and Retirement Study (HRS) and linked administrative records, we explore differences in old-age benefits between men and women attributable to differences in length of work life and pay. We find that most women are fully insured for Social Security purposes, but those who are not would have to work substantially more to become eligible. Among those who are eligible, additional work would translate into only slightly higher benefits. %B Social Security Bulletin %I 63 %V 63 %P 47-53 %G eng %U https://www.ssa.gov/policy/docs/ssb/v63n3/v63n3p47.pdf %N 3 %L pubs_2000_Levine_PSSB.pdf %4 Social Security and Public Pensions/Economics of Gender/Economics of the Elderly/Retirement/Retirement Policies/Old/Social Security/Women %$ 1148 %0 Journal Article %J Journal of Human Resources %D 2000 %T Explaining Applications to the U.S. Disability System: A Semiparametric Approach %A Kreider, Brent %A Riphahn, Regina T. %K Disabilities %K Methodology %K Pensions %K Public Policy %K Social Security %X This study investigates the determinants of applications for U.S. disability benefits between, 1986 and 1993 using a semiparametric discrete factor procedure separately for men and women. Approximating a dynamic optimization model, the estimation accounts for a variety of potential biases that were unaddressed in prior studies. Our results indicate different responses of men and women to variations in policy measures. Past labor earnings and fringe benefits as well as benefit eligibility and benefit amounts clearly affect application behavior. %B Journal of Human Resources %I 35 %V 35 %P 81-115 %G eng %N 1 %L pubs_2000_Kreider_BJHR.pdf %4 Social Security and Public Pensions/Public Policy/Disability/Disability/Benefits/Microeconomic Data Management %$ 1024 %R 10.2307/146357 %0 Journal Article %J The Gerontologist %D 2000 %T The Future of Age Integration in Unemployment %A John C Henretta %K Adult children %K Demographics %K Employment and Labor Force %K Methodology %K Other %K Retirement Planning and Satisfaction %K Social Security %X This article discusses the direction and implications of current and possible future trends in workplace age integration. The study used HRS respondents' attitudes towards work as a way of examining the possible supply of older workers. Overall, there are a number of underlying trends that will combine in the near future that will likely result in an increase of older persons remaining in the work force for longer. The shifting population age composition and the high education and ability levels of the cohorts born around 1950 are some of the trends that contribute to the increased demand for older workers. Other trends, such as changes in Social Security eligibility ages, the shift to DC pension plans, and the improving health of older cohorts, contribute to the increase in the supply of older workers. HRS data indicate that an overwhelming majority, 77 of men and 71 of women, say that they would like to continue some paid work when they retire. Evidence also suggests that since job flexibility among this cohort is limited, that either significant job changing from pre-retirement to postretirement jobs will be required, or significant job redesign must occur. %B The Gerontologist %I 40 %V 40 %P 286-92 %G eng %N 3 %L pubs_2000_Henretta_JGer.pdf %4 Adult/Employment/Trends/Female/Human/Intergenerational Relations/Middle Age/Population Dynamics/Retirement/Social Security/Support, U.S. Government--PHS/United States %$ 8372 %R 10.1093/geront/40.3.286 %0 Report %D 2000 %T How Effective is Redistribution Under the Social Security Benefit Formula? %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Income %K Retirement Planning and Satisfaction %K Social Security %X This paper uses earnings histories obtained from the Social Security Administration and linked to the survey responses for participants in the Health and Retirement Study to investigate redistribution under the current social security benefit formula. When individuals are arrayed by indexed lifetime earnings, benefits are significantly redistributed from those with high lifetime earnings to those with low lifetime earnings. However, much of this apparent redistribution is from men to women, and when examined at the level of the family, from primary to secondary earners. When families are arrayed according the total lifetime earnings, and spouse and survivor benefits are taken into account, the extent of redistribution from families with high lifetime earnings to families with low lifetime earnings is roughly halved. When families are arrayed by their earnings potential, i.e., earnings during years when both spouses are engaged in substantial work, there is very little redistribution from families with high to low earnings capacity. Accordingly, at least for families on the verge of retirement day, introducing a system that ignored issues of redistribution would have no major effect on the distribution of social security benefits net of taxes among families with different earnings capacities. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge, MA %G eng %U https://www.nber.org/papers/w7597#:~:text=When%20families%20are%20arrayed%20according,lifetime%20earnings%20is%20roughly%20halved. %4 Personal Income and Wealth Distribution/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Social Security/Income Redistribution/Retirement %$ 1122 %0 Report %D 2000 %T How Should We Insure Longevity Risk in Pensions and Social Security? %A Brown, Jeffrey R. %K Health Conditions and Status %K Pensions %K Social Security %B Center for Retirement Research at Boston College Briefs %I Center for Retirement Research at Boston College %C Boston %G eng %U https://crr.bc.edu/briefs/how-should-we-insure-longevity-risk-in-pensions-and-social-security/ %L wp_2000/Brown_ib4.pdf %4 Longevity/Pensions/Social Security %$ 8404 %0 Journal Article %J Soc Secur Bull %D 2000 %T HRS data set: Respondent Earnings and Social Security Benefits Files. %A Unattributed %K Humans %K Income %K Social Security %K United States %B Soc Secur Bull %I 63 %V 63 %P 72-3 %8 2000 %G eng %N 4 %1 http://www.ncbi.nlm.nih.gov/pubmed/11641990?dopt=Abstract %4 HRS content and design %$ 8648 %0 Report %D 2000 %T Nonrandom Selection in the HRS Social Security Earnings Sample. %A Steven Haider %A Solon, Gary %K Methodology %K Social Security %X The Health and Retirement Study (HRS), administered by the Institute for Social Research (ISR) at the University of Michigan, is a longitudinal survey of the population of U.S. households with at least one adult between the ages of 51 and 61 in 1992 (individuals born between 1931 and 1941). Wave 1 of the survey was carried out in 1992 with subsequent waves to be conducted every two years. In Wave 1, the HRS collected data on 12,652 respondents from 7,702 households. In accordance with an agreement with the Social Security Administration, HRS respondents were asked to grant ISR permission to obtain the respondents' earnings histories as reported to the Social Security Administration. Such data are extremely valuable because they provide unusually accurate administrative earnings histories over an unusually long period, 1951- 1991, and these data can be used in conjunction with the wealth of survey information collected in the HRS itself. Because of the highly confidential nature of the data, the earnings histories are not part of the FIRS public release data sets; rather, the Social Security earnings data are provided only through special permission from the HRS. %I Santa Monica, CA, RAND Corp. %G eng %U https://www.rand.org/pubs/drafts/DRU2254.html %L wp_2000/Haider-Solon2000.pdf %4 Earnings and Benefits File/HRS content and design/Record Linkages/Social Security Research %$ 1224 %0 Journal Article %J Journal of Aging and Social Policy %D 2000 %T Potential Consequences of Raising the Social Security Eligibility Age on Low-Income Older Workers %A Namkee G Choi %K Demographics %K Employment and Labor Force %K Public Policy %K Social Security %X To examine the potential consequences of raising the Social Security retirement age or future cohorts of low-income elders, this study, based on data from the Health and Retirement Study, 1992-1994, identifies factors that may hinder or facilitate continuous employment among older workers born between 1931 and 1941. Specifically, following the analysis of labor-force participation rates and self-reported reasons for non-work, multivariate logistic regression models tested the relationship between individual strengths and constraints, social-structural opportunities and constraints, and economic need variables and the likelihood of work. The findings show that for both men and women, having disabilities was the most significant predictor of non-work. Racial differences, especially in men's labor-force participation rates, appeared to be due in large part to significant racial differences in disability rates. A higher proportion of blacks and Hispanics than whites also reported that they were unemployed. Based on the findings, raising the Social Security eligibility age is likely to result in increased numbers of Disability Insurance (DI) claimants, and the fiscal impact of such an increase needs to be examined. The need to assist unemployed older persons is also discussed. %B Journal of Aging and Social Policy %I 11 %V 11 %P 15-39 %G eng %N 4 %4 Social Security/Low Income Groups/Workers/Labor Force Participation/Racial Differences/Social Policy/Elderly %$ 1254 %R 10.1300/J031v11n04_04 %0 Journal Article %J Social Security Bulletin %D 2000 %T Retirement Outcomes in the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %K Consumption and Savings %K Demographics %K Retirement Planning and Satisfaction %K Social Security %X This study examines retirement outcomes in the first four waves of the 1992 -98 Health and Retirement Study (HRS). The article compares outcomes under alternative definitions of retirement, describes differences in outcomes among demographic groups, compares retirement dynamics based on self-reported retirement status, and compares retirement flows in the 1990s and 1970s and between cohorts of the HRS. Among other findings, measured retirement is seen to differ, sometimes substantially, with the definition of retirement used and among the various groups analyzed. %B Social Security Bulletin %I 63 %V 63 %P 57-71 %G eng %U https://www.ssa.gov/policy/docs/ssb/v63n4/v63n4p57.pdf %N 4 %L pubs_2000_Gustman_ASSB.pdf %4 Retirement/Retirement Policies/Economics of the Elderly/Social Security and Public Pensions/Demographics/Retirement %$ 1130 %0 Journal Article %J American Economic Review %D 2000 %T Saver Behavior and 401(k) Retirement Wealth %A James M. Poterba %A Steven F Venti %A David A Wise %K Consumption and Savings %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Contributions to 401(k) plans are now the most important form of retirement saving. Since 401(k) plans were introduced in the early 1980's, they have expanded rapidly and continuously. By 1998, roughly half of all households were eligible to participate in 401(k) plans, and more than 36 million workers made contributions to these employer-provided saving plans. In 1995, the last year for which the U.S. Department of Labor has released definitive data, 401(k) contribu- tions amounted to $87.4 billion, or 55 percent of all contributions to employer-sponsored pension plans. The level of contributions, and their share of all pension contributions, is probably signifi- cantly higher today. The spread of 401(k) plans is the most important indicator of the move to personal retirement saving. In 1980, almost 92 percent of pension-plan contributions were to tradi- tional employer-provided plans, and about 64 percent of these contributions were to conventional defined-benefit plans. Today, almost 60 percent of contributions are to personal retirement accounts, including 401(k), IRA, and Keogh plans. Including employer- provided, non-40 1 (k) defined-contribution plans, over 76 percent of contributions are to plans that are controlled in large measure by individuals. These individuals make partici- pation, contribution, asset-allocation, and withdrawal decisions. In this paper, we describe the likely impor- tance of 401(k) assets for future older Ameri- cans and the effect of investment decisions on asset accumulation. We also examine the extent to which retirement assets may be affected by several decisions: preretirement withdrawals, management fees and expenses, contribution rates, and early retirement. Our analysis focuses on 401(k) saving, but applies more broadly to other forms of individual retirement saving. %B American Economic Review %I 90 %V 90 %P 297-302 %G eng %U https://www.jstor.org/stable/117239?seq=1 %N 2 %4 401(k) participation and balances/Retirement Wealth/Consumer Economics/Retirement Policies/Social Security and Public Pensions %$ 8652 %0 Report %D 2000 %T Social Security and Retirement %A Courtney Coile %A Gruber, Jonathan %K Retirement Planning and Satisfaction %K Social Security %X A critical question for Social Security policy is how program incentives affect retirement behavior. We use the wealth of new data available through the Health and Retirement Survey (HRS) to examine the impact of Social Security incentives on male retirement. We implement forward-looking models of retirement whereby individuals consider not just the incentives to work in the next year but in all future years as well. We find that such forward looking incentive measures for Social Security are significant determinants of retirement decisions. Our findings suggest that Social Security policies which increase the incentives to work at older ages can significantly reduce the exit rate of older workers from the labor force. %B NBER Working Paper %I National Bureau of Economic Research %C Cambridge %G eng %L wp_2000/CRRwp_2000-11.pdf %4 Retirement/Social Security %$ 13402 %R 10.3386/w7830 %0 Book Section %B Issues in the Economics of Immigration %D 2000 %T Social Security Benefits of Immigrants and U.S. Born %A Alan L Gustman %A Thomas L. Steinmeier %E Borjas, George %K Consumption and Savings %K Demographics %K Employment and Labor Force %K Pensions %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Immigrants realize higher Social Security benefits per year worked in the U.S. then U.S. born, even when earnings are identical in all years the immigrant has been in the U.S. The benefit formula favors those with low lifetime covered earnings, and the years prior to immigration are treated as years of zero earnings. If instead earnings were averaged only over years of residence in the U.S., and benefits were prorated based on the share of a 35 or 40 year base period spent in residence, immigrants would receive the same return on their social security taxes as U.S. born. For a sample from the Health and Retirement Study, a group born between 1931 and 1941, prorating reduces immigrants' social security benefits by 7 to 15 percent. For immigrants who entered in the 1980's, the reductions would be over 30 percent. Prorating would reduce the present value of benefit payments to immigrants born from 1932 to 1941 by 7.5 billion to 15 billion. Most immigrants will still pay slightly more in taxes than they will receive in benefits. Taxes received from immigrants who subsequently emigrate without collecting benefits tip the balance in favor of including immigrants. %B Issues in the Economics of Immigration %I University of Chicago Press %P 309-350 %G eng %4 Migration--International/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Immigrants/Social Security/Benefit Formulas/Taxes %$ 8218 %+ NBER Working Paper 6478. Copies available from: National Bureau of Economic Research, 1050Mass achusetts Avenue, Cambridge, MA 02138. %R 10.3386/w6478 %0 Book Section %B Forecasting Retirement Needs and Retirement Wealth %D 2000 %T Social Security Earnings and Projected Benefits %A Olivia S. Mitchell %A Olson, Jan %A Thomas L. Steinmeier %E Olivia S. Mitchell %E Hammond, B. %E Rappaport, A. %K Pensions %K Social Security %B Forecasting Retirement Needs and Retirement Wealth %I Univ. of Pennsylvania Press %C Philadelphia %P 327-359 %G eng %4 Social Security/Benefits %$ 8426 %! Social Security Earnings and Projected Benefits %0 Journal Article %J Soc Secur Bull %D 1999 %T Characteristics of individuals with integrated pensions. %A Bender, K A %K Bias %K Data collection %K Educational Status %K ethnicity %K Female %K Humans %K Income %K Labor Unions %K Male %K Middle Aged %K Occupations %K Pensions %K Regression Analysis %K Reproducibility of Results %K Retirement %K Sex Factors %K Social Security %K Socioeconomic factors %K United States %X

Employer pensions that integrate benefits with Social Security have been the focus of relatively little research. Since changes in Social Security benefit levels and other program characteristics can affect the benefit levels and other features of integrated pension plans, it is important to know who is covered by these plans. This article examines the characteristics of workers covered by integrated pension plans, compared to those with nonintegrated plans and those with no pension coverage. Integrated pension plans are those that explicitly adjust their benefit structure to help compensate for the employer's contributions to the Social Security program. There are two basic integration methods used by defined benefit (DB) plans. The offset method causes a reduction in employer pension benefits by up to half of the Social Security retirement benefit; the excess rate method is characterized by an accrual rate that is lower for earnings below the Social Security taxable maximum than above it. Defined contribution (DC) pension plans can be integrated along the lines of the excess rate method. To date, research on integrated pensions has focused on plan characteristics, as reported to the Bureau of Labor Statistics (BLS) through its Employee Benefits Survey (EBS). This research has examined the prevalence of integration among full-time, private sector workers by industry, firm size, and broad occupational categories. However, because the EBS provides virtually no data on worker characteristics, analyses of the effects of pension integration on retirement benefits have used hypothetical workers, varying according to assumed levels of earnings and job tenure. This kind of analysis is not particularly helpful in examining the potential effects of changes in the Social Security program on workers' pension benefits. However, data on pension integration at the individual level are available, most recently from the Health and Retirement Study (HRS), a nationally representative survey of individuals aged 51-61 in 1992. This dataset provides the basis for the analysis presented here. The following are some of the major findings from this analysis. The incidence of pension integration in the HRS sample is 32 percent of all workers with a pension (14 percent of all workers). The HRS can also identify integrated DC plans, a statistic that is not available from BLS data. The rate of integration for workers with only DC plans is 8 percent. After controlling for other variables, several socio-demographic characteristics are significantly related to the incidence of integration. The probability of having an integrated pension is 4.6 percentage points less for men compared to women. Non-Hispanic blacks are 6.4 percentage points less likely than non-Hispanic whites to have integrated pensions. Union members are 14 percentage points less likely to have integrated pensions, while workers with less than a graduate level education are at least 15 percentage points more likely to have a pension that is integrated. Some earnings and pension characteristics are also significantly correlated with pension integration. Earnings are positively related, with the probability of having an integrated pension increasing by 2 percentage points for an increase of $1,000 in annual pay. An even larger effect comes from earning at or above the Social Security taxable maximum. Workers at or above this income level are 10 percentage points more likely to have an integrated plan, but for those with more than one plan the probability of pension integration goes up by 13 percentage points.

%B Soc Secur Bull %I 49 %V 62 %P 28-40 %8 1999 %G eng %N 3 %L newpubs20090302_BenderQJEF.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/10732369?dopt=Abstract %3 10732369 %4 Pensions/Pension Plans %$ 19810 %0 Journal Article %J Carnegie Rochester Conference Series on Public Policy %D 1999 %T Effect of Pensions on Saving: Analysis with Data from the Health and Retirement Study: A Comment %A Rust, John %K Consumption and Savings %K Employment and Labor Force %K Income %K Pensions %K Retirement Planning and Satisfaction %K Social Security %B Carnegie Rochester Conference Series on Public Policy %I 50 %V 50 %P 325-35 %G eng %N 99 %L pubs_1999_Rust_JCarn.pdf %4 Retirement/Retirement Policies/Personal Income and Wealth Distribution/Nonwage Labor Costs and Benefits/Private Pensions/Consumer Economics: Empirical Analysis/Consumer Economics: Empirical Analysis/Social Security and Public Pensions/Pension/Retirement/Saving %$ 1186 %R 10.1016/S0167-2231(99)00031-7 %0 Journal Article %J Labour Economics %D 1999 %T An Empirical Analysis of the Social Security Disability Application, Appeal, and Award Process %A Hugo Benítez-Silva %A Buchinsky, Moshe %A Hiu-Man Chan %A Rust, John %A Sheidvasser, Sofia %K Disabilities %K Employment and Labor Force %K Health Conditions and Status %K Net Worth and Assets %K Social Security %X This paper uses the first three waves of the HRS to provide an empirical analysis of the Social Security disability application, award, and appeal process. %B Labour Economics %I 6 %V 6 %P 147-178 %G eng %N 2 %L pubs_1999_Benitez-Silva_HLabEcon.pdf %4 Economic Status/Labor/Health Status/Disability/Disability/Social Security %$ 8304 %R 10.1016/S0927-5371(99)00014-7 %0 Journal Article %J American Economic Review %D 1999 %T An Empirical Examination of Information Barriers to Trade in Insurance %A Cawley, John %A Philipson, Tomas %K Insurance %K Social Security %B American Economic Review %I 89 %V 89 %P 827-848 %G eng %N 4 %L pubs_1999_Cawley_JAER.pdf %4 Social Security/Insurance %$ 8204 %0 Thesis %D 1999 %T Essays in Applied Microeconometrics %A Robert R. Weathers II %K Demographics %K Disabilities %K Employment and Labor Force %K Methodology %K Social Security %X This dissertation consists of three essays in applied microeconometrics. In the first essay, I use retrospective data from the Health and Retirement Study (HRS) together with matching state level data on SSDI allowance rates and individual level Social Security administrative record data on the generosity of SSDI benefits to examine how the Social Security Disability Insurance program affects a person's work behavior following the onset of a disability. A hazard model that allows for both measured and unmeasured heterogeneity is used to estimate the relative importance of policy variables--employer accommodation as well as the relative value and likelihood of acceptance onto the SSDI program--on the timing of SSDI application following the onset of a disability. The results show that employer accommodation significantly slows a worker's application for SSDI benefits while easier access to SSDI benefits and more generous SSDI benefits increase the speed of application following the onset of a health condition. In the second essay, I develop three approaches that may be used to obtain consistent estimates of the structural parameters in the fixed effects ordered logit model. The first approach uses the adjacent categories form of the ordered logit along with the conditional logit and minimum distance estimator to obtain estimates of the structural parameters. In a second step, the Generalized Method of Moments (GMM) is used to estimate the sum of the limit parameters and the fixed effects, and finally the limits are estimated based on the means of the sums. The other approaches interpret fixed effects as random effects. The second approach specifies the fixed effects as omitted variables that raise the variance of the disturbance and bias the logit estimates. A generated regressor is created to allow the bias to be corrected. The third approach generalizes a new method of estimation for the fixed effects logit model to the ordered logit. Specification tests are extended to these estimators and a Monte Carlo experiment is constructed to test the small sample properties of the estimator. The third essay uses data from the Panel Study of Income Dynamics (PSID) to examine how experience with entrepreneurship--defined as persons who are self-employed--has affected an individual's place in the earnings distribution. The strategy is to follow individuals' positions in the income distribution over time, and to see how their mobility was affected by involvement with entrepreneurship. The results show that for low-income individuals there is some merit to the notion that the self-employed moved ahead in the earnings distribution relative to those who remained wage earners. On the other hand, for those at the upper end of the earnings distribution, those who became self-employed often advanced less in the earnings distribution than their wage and salary counterparts. %I Syracuse University %8 1999 %G eng %4 Methodology Data Analysis (D516763) %$ 5031 %+ ISBN 0-599-68954-4 %! Essays in Applied Microeconometrics %0 Journal Article %J Social Security Bulletin %D 1999 %T Linkages with Data from Social Security Administrative Records in the Health And Retirement Study %A Olson, Janice A. %K Consumption and Savings %K Disabilities %K Health Conditions and Status %K Retirement Planning and Satisfaction %K Social Security %B Social Security Bulletin %I 62 %V 62 %P 73-85 %G eng %U https://pdfs.semanticscholar.org/0102/25f99619b461ae90f1ed2b74deb3c12c2e47.pdf %N 2 %L pubs_1999_Olson_J_SSB_Linkages.pdf %4 Social Security and Public Pensions/Disability/Disability/Economic Behavior/Retirement/Retirement Policies/Economics of the Elderly/Health/Retirement/Social Security %$ 1182 %0 Book Section %B Handbook of labor economics. Volume 3C %D 1999 %T New Developments in the Economic Analysis of Retirement %A Lumsdaine, Robin L. %A Olivia S. Mitchell %E Ashenfelter, Orley %E Card, David %K Consumption and Savings %K Employment and Labor Force %K Pensions %K Retirement Planning and Satisfaction %K Social Security %B Handbook of labor economics. Volume 3C %S Handbooks in Economics %I Elsevier Science, North-Holland %C Amsterdam; New York and Oxford %P 3261-3307 %G eng %U https://eml.berkeley.edu/~saez/course/lumsdaine-mitchell1999handbook.pdf %N 5 %4 Retirement/Retirement Policies/Economics of the Elderly/Social Security and Public Pensions/Nonwage Labor Costs and Benefits/Private Pensions/Labor Force--Demographics/Retirement %$ 1038 %! New Developments in the Economic Analysis of Retirement %& 49 %0 Book Section %B Wealth, Work and Health: Innovations in Measurement in the Social Sciences %D 1999 %T Pension and Social Security Wealth in the Health and Retirement Study %A Alan L Gustman %A Olivia S. Mitchell %A Andrew A. Samwick %A Thomas L. Steinmeier %E James P Smith %E Robert J. Willis %K Net Worth and Assets %K Pensions %K Social Security %X This study attempts to understand the impact of pension and social security wealth on decisions made by people of retirement age. Their in-depth analysis of the Health and Retirement Study gives many interesting findings. Of those people participating in the Health and Retirement Study, more then half of the wealth is in the form of social security, pensions, and health insurance. Various topics are explored in this paper. %B Wealth, Work and Health: Innovations in Measurement in the Social Sciences %I University of Michigan Press %C Ann Arbor, MI %P 150-208 %G eng %4 Pensions/Social Security/Wealth %$ 8198 %+ HRS: 1992 %! Pension and Social Security Wealth in the Health and Retirement Study %0 Book %B Pension Research Council Publications %D 1999 %T Prospects for Social Security Reform %A Olivia S. Mitchell %A Myers, Robert %A Young, Howard %K Older Adults %K Retirement Planning and Satisfaction %K Social Security %B Pension Research Council Publications %I University of Pennsylvania Press %C Philadelphia %@ 9780812234794 %G eng %U https://www.upenn.edu/pennpress/book/4266.html#:~:text=Prospects%20for%20Social%20Security%20Reform%20informs%20the%20debate%20by%20exploring,reform%20might%20affect%20the%20economy. %0 Thesis %D 1999 %T Social Security Disability Insurance and Older Workers %A Park, Cheolsung %K Disabilities %K Employment and Labor Force %K Public Policy %K Social Security %X The objective of this study is to estimate how individuals respond to policies designed to reduce the financial cost of the Social Security Disability Insurance (SSDI) program. In this study, I develop a dynamic stochastic discrete choice model of work, leisure, and application for SSDI benefits for single workers and for married couples. I estimate the structural parameters of the model, using first three waves of the Health and Retirement Study (HRS), allowing for unobserved heterogeneity in preferences. The model is shown to fit to the data well. Based on the estimated parameters, three policies aimed at reducing the number of applications and subsequently the number of recipients are simulated: reducing the SSDI benefit amount by half, lowering the acceptance rate of applications by half, and lowering renewal rate of SSDI benefits by half. The results of the policy experiments show that all three policies can successfully reduce the number of applicants and recipients. Individuals who would receive low benefits and/or earn high wages stop applying. Among the three policies, reducing the renewal rate has the biggest impact. The results also show that the disabled reduce the application rate more do those who are not disabled. Policy experiments which reduce errors in the SSA's acceptance also are performed. They show that reducing the Type I error (rejection of an application from a truly disabled individual) and the Type II error (acceptance of an application from an able individual) in a symmetric fashion increases the number of applications for and recipients of disability benefits and total disability benefit payment. %I University of Pennsylvania %8 1999 %G eng %4 Public Policy %$ 5019 %+ ISBN 0-599-39026-3 %! Social Security Disability Insurance and Older Workers %0 Report %D 1999 %T Social Security Reform: Implications of Raising the Retirement Age %A United States General Accounting Office %K Employment and Labor Force %K Public Policy %K Retirement Planning and Satisfaction %K Social Security %X Question: How might increases to the Social Security retirement age affect the solvency of the Old-Age Survivors Insurance, Disability Insurance, and Supplemental Security Income programs? Finding: Raising the Social Security early or full eligibility retirement ages could improve the OASDI balance sheet by reducing benefits paid out and increasing payroll taxes collected as well as contribute to economic growth as workers staying in the labor force for longer. However, this could lead to higher unemployment at younger ages and increases in applications for DI and SSI (among those who for health reasons are not able to stay in the labor force longer). Some portions of the population (e.g., less-healthy older workers and those in blue-collar occupations) may encounter difficulties remaining in the labor force. Recommendation: There is a need for greater understanding through further research on how to prevent effects of any changes from falling disproportionately on already-vulnerable populations. %I Washington, DC, U.S. General Accounting Office %G eng %U https://www.gao.gov/products/GAO/HEHS-99-112 %4 retirement age/labor Force Participation/social security/Public Policy/unemployment/OASDI %$ 62548 %0 Journal Article %J Social Security Bulletin %D 1999 %T Who Is 62 Enough ? Identifying Respondents Eligible for Social Security Early Retirement Benefits in the Health and Retirement Study %A Olson, Janice A. %K Consumption and Savings %K Social Security %X Workers are not instantly eligible for Social Security retirement benefits on their 62nd birthdays, nor can they receive benefits in the month they turn 62. This note discusses how well researchers can do using data from the Health and Retirement Study (HRS) to identify respondents old enough to receive and report early Social Security retirement benefits. It shows that only some workers aged 62 at the time of an HRS interview will be “62 enough” to have received a Social Security benefit and reported it in the survey. In general, workers become eligible for a retirement benefit the month after they turn 62, and they may receive their first payment the month after that. Until recently, payments were received very early in the month, but in mid1997 and later, the Social Security Administration (SSA) staggered benefit payments over the course of a month. Therefore, many beneficiaries will not be able to report the receipt of their first benefit payment until the third month after their birthday in more recent HRS interviews. This note describes the best approach for approximating the pool of HRS respondents who are old enough to have reported the receipt of their first retirement benefit. It then applies the procedure to an analysis by Burkhauser, Couch, and Phillips, who used the 1994 HRS data to distinguish between those who took early retirement benefits upon turning 62 and those who postponed the receipt of benefits. Because these authors did not provide for respondents who were not “62 enough” to receive a benefit at the time of the interview, they understated the proportion of respondents who took retirement benefits at age 62. %B Social Security Bulletin %I 62 %V 62 %P 51-56 %G eng %U https://www.ssa.gov/policy/docs/ssb/v62n3/v62n3p51.pdf %N 3 %L pubs_1999_Olson_JSSB.pdf %4 Social Security and Public Pensions/Economics of the Elderly/Social Security %$ 1176 %0 Report %D 1998 %T Effects of Pensions on Savings: Analysis with Data from the Health and Retirement Study %A Alan L Gustman %A Thomas L. Steinmeier %K Adult children %K Consumption and Savings %K Employment and Labor Force %K Income %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X This paper examines the composition and distribution of total wealth for a cohort of 51- to 61-year olds from the Health and Retirement Study (HRS), and the role of pensions in forming retirement wealth. Pension coverage is widespread, covering two-thirds of households and accounting for one-quarter of accumulated wealth. Social security benefits account for another quarter of total wealth. As calculated from earnings records, the present discounted value of social security benefits is less than the present value of taxes paid. Earlier than many expected, social security is already a poor investment on average for this cohort on the verge of retirement. When pensions and social security are included, wealth accumulated by the HRS population to date is substantial. At their expected retirement date, using only the wealth accumulated by their mid-fifties, the HRS household with median replacement rate could finance a fixed, nominal two-thirds joint and survivor annuity replacing 79 percent of last earnings, and a real annuity replacing 52 percent of last earnings. Replacement rates for median earners are higher. Additional savings made over the seven years remaining until retirement will raise those replacement rates by about a fifth. When measured against a standard of adequacy based on average yearly earnings over the worklife, with adjustments made for the absence of preretirement savings, children, taxes, work-related expenses and other factors, these replacement rates appear adequate. Lifetime earnings are measured for each individual in the HRS from social security earnings records augmented by self-reported earnings histories. When pensions and social security are counted in total wealth, the ratio of wealth to lifetime earnings declines from very high levels in the bottom ten percent of the earnings distribution, remains at roughly 40 percent from the 25th through 95th percentile of the lifetime earnings distribution, and then falls to 32 percent for those in the top five percent of the earnings distribution. This result is consistent with the predictions of a simple, stripped-down life-cycle model. Also consistent is a finding that the ratio of wealth to lifetime earnings is no higher for those with pensions than for those without pensions. However, heterogeneity is quite important. Real estate and business wealth are a larger share of total wealth for those without pensions, reflecting the importance of self-employment in wealth accumulation. Multivariate regressions relating total wealth to pension coverage and pension value, which standardize for sources of heterogeneity, suggest that pensions cause very limited displacement of other wealth, if any. Pensions add to total wealth by at least half the value of the pension, and in most estimates by a good deal more. These findings are not consistent with a simple life-cycle explanation for savings. They also raise questions about whether pensions are fundamentally a tax avoidance device, allowing substitution of pension for nonpension savings. %B NBER Working Paper %I NBER %C Cambridge %G eng %U https://www.nber.org/papers/w6681.pdf %4 Personal Income and Wealth Distribution/Retirement/Retirement Policies/Social Security and Public Pensions/Nonwage Labor/Private Pensions/Consumer Economics: Empirical Analysis/Consumer Economics: Empirical Analysis/Distribution/Households/Pension/Retirement/Saving/Social Security/Wealth %$ 1184 %0 Report %D 1998 %T The Impact of Pay Inequality, Occupational Segregation, and Lifetime Work Experience on Retirement Income of Women and Minorities %A Olivia S. Mitchell %A Phillip B. Levine %A John W R Phillips %K Demographics %K Housing %K Income %K Net Worth and Assets %K Pensions %K Social Security %K Women and Minorities %X In this study the researchers review data on earnings and search for differences between men and women, as well as, differences between whites and minorities. Specifically, the researchers examine Social Security, employer-provided pensions, and financial assets, like homes. Observations and analysis of the data show that occupational segregation along with pay differences explain the vast majority of the retirement income differences. Most of the pay difference between men and women is in the form of pension size. Many interesting findings are given with possible explanations and ways of fixing the discrepancies. Cross-tabulations are done to show differences between the married and non-married, as well. %G eng %4 Earnings and Benefits File/Social Security and Public Pensions/Pensions/Retirement Incomes/Assets/Housing Equity/Female/Minorities/Whites %$ 6556 %0 Journal Article %J American Economic Review %D 1998 %T Married Women's Retirement Expectations: Do Pensions and Social Security Matter? %A Honig, Marjorie %K Methodology %K Pensions %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %B American Economic Review %I 88 %V 88 %P 202-206 %G eng %U https://ideas.repec.org/a/aea/aecrev/v88y1998i2p202-06.html %N 2 %L pubs_1998_Honig_MAER.pdf %4 Retirement/Retirement Policies/Social Security and Public Pensions/Economics of Gender/Pension/Retirement/Social Security/Women %$ 1006 %0 Book Section %B Privatizing Social Security %D 1998 %T Privatizing Social Security: First Round Effects of a Generic Voluntary Privatized U.S. Social Security System %A Alan L Gustman %A Olivia S. Mitchell %A Thomas L. Steinmeier %E Feldstein, M.S. %K Methodology %K Public Policy %K Social Security %B Privatizing Social Security %I University of Chicago Press %C Chicago, IL %P 313-57 %G eng %4 Social Security Research/Privatization/Public Policy %$ 8646 %! Privatizing Social Security: First Round Effects of a Generic Voluntary Privatized U.S. Social Security System %0 Journal Article %J GAO Testimony before the Special Committee on Aging, U.S. Senate %D 1998 %T Social Security Reform: Raising Retirement Ages Improves Program Solvency but May Cause Hardship for Some %A Bovbjerg, Barbara D. %K Demographics %K Disabilities %K Employment and Labor Force %K Health Conditions and Status %K Net Worth and Assets %K Social Security %X This report examines how raising the retirement age could affect Social Security (SS) and the economy and how the labor market might respond to these changes. It then looks at the possible impacts this raising of the age would have on the Disability Insurance (DI) and Supplemental Security Income (SSI) programs. The analysis shows that due to high life expectancies and the overall good health condition of the elderly, raising the retirement age could improve SS program's long-term solvency and could increase economic output. However, potential negative effects arise from the fact that older workers who have been laid off or have been retired may experience difficulties finding jobs. While the elderly may be willing to continue working, it is questionable whether employers will be willing to retain and hire them. Another possible drawback to raising the retirement age is explained by using the Health and Retirement Study. HRS data demonstrated that blue-collar workers in particular would be disproportionately affected by this age increase because due to the nature of their jobs which puts them at an increased risk of incurring health problems, they may be unable to remain in the workforce in later ages. These poor health, predominately blue-collar workers who will not receive SS retirement benefits because they cannot continue working up until the new age set by the increase, may apply for DI or be eligible for SSI, which would increase the costs of those programs. %B GAO Testimony before the Special Committee on Aging, U.S. Senate %I GAO/T-HEHS-98-207 %V GAO/T-HEHS-98-207 %G eng %N July %4 Labor Force/Health Status/Basic Demographics/Economic Status/Disability/Disability/Social Security %$ 8230 %0 Report %D 1997 %T Applications to the US Disability Program: A Semiparametric Approach %A Riphahn, Regina T. %A Kreider, Brent %K Disabilities %K Retirement Planning and Satisfaction %K Social Security %X This study investigates the determinants of applications for U.S. disability benefits between 1986 and 1993 using a semiparametric discrete factor procedure. Approximating a dynamic optimization model, the estimation carefully accounts for a variety of potential biases that were not addressed in previous studies. Our results indicate vast differences in the responses of men and women to variations in policy measures. Past labor earnings and fringe benefits as well as benefit eligibility and benefit amounts clearly affect application behavior. %G eng %U https://ideas.repec.org/p/cpr/ceprdp/1559.html %4 Social Security and Public Pensions/Retirement/Retirement Policies/Disability/Disability %$ 1028 %0 Report %D 1997 %T The Changing Economic Circumstances of the Elderly: Income, Wealth and Social Security %A James P Smith %K Health Conditions and Status %K Income %K Net Worth and Assets %K Social Security %X This Policy Brief looks at how the economic status of the elderly is changing and discusses their prospects for the future. While the economic status of the elderly has dramatically improved over the decades and there is evidence of modest wealth holdings by the typical older household, there still exists the reality of economic disparities. Many older Americans remain economically vulnerable and there are large inequalities in wealth. Wide disparities exist across racial and ethnic groups and across age groups, with the oldest households always faring worst, largely due to deaths of spouses. Evidence suggests that while income explains a significant part of the existing wealth disparities, it is not the sole factor. The other contributing factors are the significantly lower savings rates for low- and middle-income households, socioeconomic status and health, bequests motives, and Social Security. The brief ends with a discussion about the power of Social Security as a highly successful redistributive system and the reasons behind its need for reform. %I Syracuse University %G eng %U https://ideas.repec.org/p/max/cprpbr/008.html %4 Economic Status/Wealth/Retirement Incomes/Income Inequality/Social Security/Health Status %$ 8126 %0 Journal Article %J EBRI Issue Brief %D 1997 %T Employee benefits, retirement patterns, and implications for increased work life. %A Fronstin, Paul %K Age Factors %K Aged %K Employment %K Female %K Health Benefit Plans, Employee %K Health Status Indicators %K Humans %K Male %K Medicare %K Middle Aged %K Pensions %K Private Sector %K Retirement %K Social Security %K United States %X

This Issue Brief examines why policymakers are concerned about the trend toward early retirement and how it relates to Social Security, Medicare, and employee health and retirement benefits. It reviews the rationale for the effects of economic incentives on early retirement decisions and includes a summary of empirical literature on the retirement process. It presents data on how employee benefits influence workers' expected retirement patterns. Finally, it examines the implications of public policies to reverse early-retirement trends and raise the eligibility age for Social Security and Medicare. An employee Benefit Research Institute/Gallup survey indicates that there is a direct link between a worker's decision to retire early and the availability of retiree health benefits. In 1993, 61 percent of workers reported that they would not retire before becoming eligible for Medicare if their employer did not provide retiree health benefits. Participation in a pension plan can be an important determinant of retirement. Twenty-one percent of pension plan participants planned to stop working before age 65, compared with 12 percent among nonparticipants. Workers whose primary pension plan was a defined benefit plan were more likely to expect to stop working before age 65 (23 percent) than workers whose primary plan was a defined contribution plan (18 percent). Expected income replacement rates effect retirement patterns, indicating that as the expected replacement increases, the probability of expecting to stop working before age 65 increases. Twenty-two percent of workers with an expected income replacement rate below 60 percent expected to stop working before age 65, compared with 29 percent for those in the 60-69 percent replacement range, and 30 percent for those in the 70-79 percent replacement range. Workers expecting to receive retiree health insurance are more likely to expect to stop working before age 65 than workers who do not expect to have retiree health insurance. Twenty-one percent of workers with retiree health insurance expected to stop working before age 65, compared with 12 percent of workers not expecting to receive retiree health insurance. The Social Security Old-Age and Survivors Insurance (OASI) program depends on obtaining sufficient revenue from active workers' payroll taxes to fund the benefits received by retired beneficiaries. Funding the program in the past was in large part effortless because of the relatively large number of workers per retiree. Today, funding the program is a greater challenge because the ratio of workers to retirees has fallen. Policymakers have been able to agree that reform of the program is necessary for its survival; however, the debate over options to reform the program is just beginning, and it is likely to be a long time before a consensus emerges.

%B EBRI Issue Brief %I No. 184 %P 1-23 %8 1997 Apr %G eng %U https://www.ncbi.nlm.nih.gov/pubmed/10166809 %N 184 %1 http://www.ncbi.nlm.nih.gov/pubmed/10166809?dopt=Abstract %4 Labor Force/Net Worth/Health Insurance Coverage/Retirement Behavior/Economic Status/Public Policy %$ 8108 %0 Report %D 1997 %T Pension and Social Security Wealth in the Health and Retirement Study %A Alan L Gustman %A Olivia S. Mitchell %A Andrew A. Samwick %A Thomas L. Steinmeier %K Consumption and Savings %K Income %K Medicare/Medicaid/Health Insurance %K Methodology %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Together, pensions, social security and health insurance account for half of the wealth held by all households in the Health and Retirement Study (HRS), for 60 percent of total wealth of HRS households who are in the 45th to 55th wealth percentiles, and even for 48 percent of wealth for those in the 90th to 95th wealth percentiles. The HRS surveys households aged 51 to 61 in 1992, and obtains pension plan descriptions from respondents' employers. Pension accrual profiles, income and wealth distributions by type, wealth-income ratios and accrued wealth by pension status are also explored. %I National Bureau of Economic Research %G eng %U https://www.nber.org/papers/w5912 %4 Personal Income and Wealth Distribution/Macroeconomics:/Saving/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Private Pensions/Health Insurance/Pension/Retirement/Social Security/Wealth %$ 1192 %R 10.3386/w5912 %0 Report %D 1997 %T Projected Retirement Wealth and Savings Adequacy in the Health and Retirement Study %A James Moore %A Olivia S. Mitchell %K Consumption and Savings %K Health Conditions and Status %K Net Worth and Assets %K Pensions %K Retirement Planning and Satisfaction %K Social Security %X Low saving rates raise questions about Americans' ability to maintain consumption levels in old age. Using the Health and Retirement Study, this paper explores asset holdings among a nationally representative sample of people on the verge of retirement. The authors assess how much more people would need to save in order to preserve consumption levels after retirement. They find that the median older household has current wealth of approximately 325,000 including pensions, social security, housing, and other financial wealth, an amount projected to grow to about 380,000 by retirement at age 62. Nevertheless, their model suggests that this median household will still need to save 16 of annual earnings to preserve pre-retirement consumption. For retirement at age 65, assets are expected to be 420,000 and required additional saving totals 7 of earnings per year. These summary statistics conceal extraordinary heterogeneity in both assets and saving needs in the older population. %I National Bureau of Economic Research %G eng %U https://www.nber.org/papers/w6240 %4 Macroeconomics: Consumption/Saving/Pension Funds/Other Private Financial Institutions/Institutional Investors/Social Security and Public Pensions/Economics of the Elderly/Retirement/Retirement Policies/Aging/Savings/Retirement/Consumption/Wealth %$ 1160 %R 10.3386/w6240 %0 Report %D 1997 %T Social Security Reform: Implications for Women s Retirement Income %A United States General Accounting Office %K Employment and Labor Force %K Retirement Planning and Satisfaction %K Social Security %K Women and Minorities %X Question: evaluate (1) why women s benefits are lower than men s under the current Social Security system, (2) the possible differential effects on women of the new privatization reform proposals, and (3) what can be done to minimize the possibly negative effect on women of certain elements of the Social Security reform proposals. Finding: Using the NIA-funded Health and Retirement Study, as well as citing some research conducted by NIA-funded grantees, GAO noted that women s Social Security benefits are often lower than men s due to lower wages and fewer years in the workforce. Some of the proposals to reform Social Security by shifting responsibility of saving for retirement to individuals via accounts funded as a proportion of their salary could make the difference between men s and women s benefits worse. For example, greater risk aversion among women could lead to lower investment returns; further, women could face substantially lower benefits (and hence a lower likelihood of retirement income adequacy) if annuitization formulae take their longer life expectancy into account. Recommendation: Improve information about investment objectives and financial planning to reduce differences in investment strategy and improve retirees ability to manage their assets. Consider mandatory annuitization to reduce the possibility of individuals outliving their savings. Use unisex lifetables to ensure those with comparable savings at retirement have comparable monthly benefits. %I Washington, DC, U.S. General Accounting Office %G eng %4 social Security benefit claiming/labor force/women/retirement income / United States./privatization %$ 62544 %0 Report %D 1997 %T Social Security Reform: Implications for Women's Retirement Income %A Cackley, Alicia Puente %K Adult children %K Demographics %K Net Worth and Assets %K Social Security %K Women and Minorities %X This report examines why women's benefits are lower than men's under the current Social Security system and evaluates the possible differential effects of the new privatization reform proposals on women. Average SS benefits are currently lower for women because of their lower rates of labor force participation and lower earning levels- both factors that contribute to the calculation of benefits. The reform proposals that would most affect women differently than men are the ones that create individual private savings accounts and change the way benefits would be distributed from those accounts. Because women earn less than men on average and are less likely to engage in risky high yielding assets, they would have less to invest and most likely would accumulate relatively less. Although differences in labor force participation and earnings between genders are expected to be reduced, they will not disappear. Therefore, any reform that bases benefits on earnings will continue to benefit men more than women. A system that relied mostly on individual investments would allow women workers a chance to increase their retirement benefits. %I Washington, DC, United States General Accounting Office %G eng %U http://www.gao.gov (pdf file) %4 Economic Status/Family/Basic Demographics/Social Security/Women %$ 8170 %0 Report %D 1996 %T Construction of the Earnings and Benefits File (EBF) for Use with the Health and Retirement Study %A Olivia S. Mitchell %A Olson, Jan %A Thomas L. Steinmeier %K Methodology %K Social Security %X Analysts using the Health and Retirement Survey (HRS) often require information on earnings, labor market attachment, and social security benefits in order to better understand the factors affecting retirement and well-being at older ages. To this end, several derived variables were constructed and documented in the Earnings and Benefits File (EBF) described here. The EBF provides a set of summary earnings, employment, and social security wealth measures for a subset of HRS respondents in Wave 1 of the survey, for whom administrative records are available. The EBF, a restricted data file, is available from the University of Michigan's Institute for Social Research for matching only with versions of the HRS containing geographic detail no finer than the Census Division level. Interested users should contact hrsquest@umich.edu by email for further information on access to the data. %I University of Pennsylvania %G eng %1 Note - An updated and revised version of this paper is available in Forecasting Retirement Needs and Retirement Wealth, Olivia S. Mitchell, P. Brett Hammond and Anna M. Rappaport, eds., Philadelphia: University of Pennsylvania Press, 2000. See Chapter 13, "Social Security Earnings and Projected Benefits" %4 Social Security/Record Linkages/Earnings and Benefits File %$ 6516 %0 Report %D 1996 %T Construction of the Earnings and Benefits File (EBF) for Use With the Health and Retirement Survey %A Olivia S. Mitchell %A Olson, Jan %A Thomas L. Steinmeier %K Employment and Labor Force %K Income %K Methodology %K Social Security %X Analysts using the Health and Retirement Survey (HRS) often require information on earnings, labor market attachment, and social security benefits in order to better understand the factors affecting retirement and well-being at older ages. To this end, several derived variables were constructed and documented in the Earnings and Benefits File (EBF) described here. The EBF provides a set of summary earnings, employment, and social security wealth measures for a subset of HRS respondents in Wave 1 of the survey, for whom administration records are available. The EBF, a restricted data file, is available from the University of Michigan's Institute for Social Research for matching only with versions of the HRS containing geographic detail no finer than the Census Division level. Interested users should contact hrsquest umich.edu by email for further information on access to the data. %I National Bureau of Economic Research %G eng %4 Social Security and Public Pensions/Record Linkages/Social Security Research/Labor Force Attachment/Earnings and Benefits File/Income %$ 1090 %R 10.3386/w5707 %0 Journal Article %J Gerontologist %D 1996 %T Retirement expectations: differences by race, ethnicity, and gender. %A Honig, Marjorie %K ethnicity %K Female %K Health Knowledge, Attitudes, Practice %K Humans %K Male %K Middle Aged %K Models, Theoretical %K Pensions %K Retirement %K Sex Factors %K Social Security %K United States %X

Analyses by race and ethnicity of several important dimensions of labor market behavior have been constrained in the past by limited samples of the African American and Hispanic populations. This article uses data from the first wave of the Health and Retirement Survey, which oversamples these populations, to compare the retirement plans of African American, Hispanic, and white married men and women. Findings suggest that retirement expectations may accurately forecast retirement behavior and that the differences by race and ethnicity, as well as by gender, that are evident in retirement plans are likely to be reflected in retirement outcomes.

%B Gerontologist %I 36 %V 36 %P 373-82 %8 1996 Jun %G eng %N 3 %L pubs_1996_Honig_MGer.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/8682335?dopt=Abstract %4 Labor Market/Ethnic Groups/Female/Knowledge, Attitudes, Practice/Middle Age/Models, Theoretical/Pensions/Retirement Planning/Sex Factors/Retirement Behavior/Support, Non U.S. Government/Support, U.S. Government--PHS/United States %$ 4180 %R 10.1093/geront/36.3.373 %0 Journal Article %J Gerontologist %D 1996 %T Who takes early Social Security benefits? The economic and health characteristics of early beneficiaries. %A R.V. Burkhauser %A Kenneth A. Couch %A John W R Phillips %K Aged %K Eligibility Determination %K Female %K Health Status %K Health Surveys %K Humans %K Income %K Male %K Middle Aged %K Pensions %K Retirement %K Social Security %K United States %X

Using the 1992 and 1994 Waves of the Health and Retirement Survey, we compare individuals who first take Social Security benefits at age 62 with those who don't and find that the income and net assets of these two groups are similar in the years just prior to eligibility. However, there is great diversity within the groups, so that poor health appears to be more closely related to lower economic well-being than is early Social Security acceptance status. Our results suggest that raising the Social Security retirement age is not likely to dramatically lower the economic well-being of the typical person aged 62 since only 3% of men aged 62 are receiving Social Security retirement benefits, are in poor health, and have Social Security retirement benefits as their only source of pension income.

%B Gerontologist %I 36 %V 36 %P 789-99 %8 1996 Dec %G eng %N 6 %L wp_1996/Burkhauser_hr96-030.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/8990591?dopt=Abstract %4 Comparative Study/Eligibility Determination/Female/Health Status/Health Surveys/Human/Income/Statistics and Numerical Data/Middle Age/Pensions/Statistics and Numerical Data/Retirement/Statistics and Numerical Data/Social Security/Economics/Statistics and Numerical Data/Support, U.S. Government--PHS/United States %$ 4070 %R 10.1093/geront/36.6.789 %0 Journal Article %J Econometrica %D 1994 %T Labor force dynamics of older men. %A David M. Blau %K Americas %K Developed Countries %K Economics %K Employment %K Financial Management %K Financing, Government %K Health Workforce %K North America %K Retirement %K Social Class %K Social Security %K Socioeconomic factors %K United States %X

"This paper describes and analyzes movements of older men among labor force states [in the United States] using quarterly observations derived from the Retirement History Survey (RHS)." The results indicate "substantial undercounts in the biannual data, indicating that the prevalence of labor force movements at older ages has been underestimated previously.... The results show that labor force dynamics at older ages are important, including duration and spell occurrence dependence, and work experience effects. These effects are robust to nonparametric controls for unobserved heterogeneity. The estimates indicate that social security benefits have strong effects on the timing of labor force transitions at older ages, but that changes in social security benefit levels over time have not contributed much to the trend toward earlier labor force exit."

%B Econometrica %I 62 %V 62 %P 117-56 %8 1994 Jan %G eng %U https://www.ncbi.nlm.nih.gov/pubmed/12290260 %N 1 %L pubs_1994_Blau_DEcmetrica.pdf %1 http://www.ncbi.nlm.nih.gov/pubmed/12290260?dopt=Abstract %4 Labor Force/Employment/Financial Management/Financing, Government/Retirement/Social Class/Social Security/Socioeconomic Factors %$ 4015