Retirement Responses to Early Social Security Benefit Reductions

36 Pages Posted: 17 Jan 2008

See all articles by John W. R. Phillips

John W. R. Phillips

National Institutes on Aging

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2000

Abstract

This paper evaluates potential responses to reductions in early Social Security retirement benefits. Using the Health and Retirement Study (HRS) linked to administrative records, we find that Social Security coverage is quite uneven in the older population: one-quarter of respondents in their late 50's lacks coverage under the Disability Insurance program, and one-fifth lacks coverage for old-age benefits. Among those eligible for benefits, respondents who subsequently retired early appear quite similar initially to those who later filed for normal retirement benefits, but both groups were healthier and better educated than those who later filed for disability benefits. Next we investigate the potential impact of curtailing, and then eliminating, early Social Security benefits. A life-cycle model of retirement behavior provides estimated parameters used to simulate the effects of cutting early Social Security benefits on retirement pathways. We find that cutting early Social Security benefits would boost the probability of normal retirement by twice as much as it would the probability of disability retirement.

Suggested Citation

Phillips, John W. R. and Mitchell, Olivia S., Retirement Responses to Early Social Security Benefit Reductions (September 2000). Michigan Retirement Research Center Research Paper No. WP 2000-006. Available at SSRN: https://ssrn.com/abstract=1084556 or http://dx.doi.org/10.2139/ssrn.1084556

John W. R. Phillips (Contact Author)

National Institutes on Aging ( email )

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Olivia S. Mitchell

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

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Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

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