Labor Market Shocks and Early Social Security Benefit Claiming

Many job-losers suffer large and persistent losses in earnings capacity. For displaced workers who are age-eligible, one reaction to these losses is to begin claiming Social Security retirement benefits. We use administrative earnings records from the Social Security Administration’s Continuous Work History Sample to study the impacts of labor market shocks among workers in their late 50’s and early 60’s on Social Security retirement benefit claiming rates. We find that labor market shocks lead to current and future increases in the fraction of insured workers who initiate Social Security benefits at the earliest possible claiming age. Moreover, once they initiate benefits, early claimants continue to have low levels of earnings in all subsequent years.

[1]  Alexander Strand,et al.  Does Delay Cause Decay? The Effect of Administrative Decision Time on the Labor Force Participation and Earnings of Disability Applicants , 2011, SSRN Electronic Journal.

[2]  Kathleen J. Mullen,et al.  Does Disability Insurance Receipt Discourage Work ? Using , 2013 .

[3]  S. Davis,et al.  Recessions and the Cost of Job Loss , 2011 .

[4]  Steven J. Davis,et al.  Recessions and the Costs of Job Loss , 2011, Brookings papers on economic activity.

[5]  Anya Olsen,et al.  Social Security Administration's Master Earnings File: Background Information , 2009, Social security bulletin.

[6]  Leora Friedberg,et al.  1New Evidence on the Labor Supply Effects of the Social Security Earnings Test , 2009, Tax Policy and the Economy.

[7]  Till von Wachter,et al.  Long-Term Earnings Losses due to Mass Layoffs During the 1982 , 2009 .

[8]  Jae Song,et al.  New Evidence on Earnings and Benefit Claims Following Changes in the Retirement Earnings Test in 2000 , 2007 .

[9]  Till von Wachter,et al.  Long-Term Earnings Losses Due to Job Separation During the 1982 Recession: An Analysis Using Longitudinal Administrative Data from 1974 to 2004 , 2007 .

[10]  P. Levine,et al.  Labor Market Shocks and Retirement: Do Government Programs Matter? , 2006 .

[11]  David H. Autor,et al.  The Rise in the Disability Rolls and the Decline in Unemployment , 2003 .

[12]  Peter R. Orszag,et al.  Does the Social Security Earnings Test Affect Labor Supply and Benefits Receipt? , 2000, National Tax Journal.

[13]  D. Black,et al.  The Impact of Economic Conditions on Participation in Disability Programs: Evidence from the Coal Boom and Bust. , 2002, The American economic review.

[14]  Leora Friedberg,et al.  The Labor Supply Effects of the Social Security Earnings Test , 1999, Review of Economics and Statistics.