Labor Market Shocks and Early Social Security Benefit Claiming
37 Pages Posted: 23 May 2015
There are 2 versions of this paper
Labor Market Shocks and Early Social Security Benefit Claiming
Labor Market Shocks and Early Social Security Benefit Claiming
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: Suggested Citation