Labor Market Shocks and Early Social Security Benefit Claiming

37 Pages Posted: 23 May 2015

See all articles by David Card

David Card

University of California, Berkeley - Department of Economics; Institute for the Study of Labor (IZA); National Bureau of Economic Research (NBER)

Nicole Maestas

Harvard Medical School - Department of Health Care Policy

Patrick J. Purcell

U.S. Social Security Administration

Multiple version iconThere are 2 versions of this paper

Date Written: December 2014

Abstract

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.

Keywords: Social Security, Earnings Test, Great Recession, Retirement

JEL Classification: H20, H31, J14, J26

Suggested Citation

Card, David E. and Maestas, Nicole and Purcell, Patrick J., Labor Market Shocks and Early Social Security Benefit Claiming (December 2014). Michigan Retirement Research Center Research Paper No. WP 2014-317, Available at SSRN: https://ssrn.com/abstract=2609044 or http://dx.doi.org/10.2139/ssrn.2609044

David E. Card (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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Institute for the Study of Labor (IZA)

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National Bureau of Economic Research (NBER)

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Nicole Maestas

Harvard Medical School - Department of Health Care Policy ( email )

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Patrick J. Purcell

U.S. Social Security Administration ( email )

Washington, DC 20254
United States
202-358-6348 (Phone)

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