Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving

40 Pages Posted: 19 Sep 2012 Last revised: 25 Sep 2012

See all articles by Alan L. Gustman

Alan L. Gustman

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography

Date Written: August 1, 2012

Abstract

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.

Keywords: Retirement, Saving, Behavior, Social Security claiming rates

Suggested Citation

Gustman, Alan L. and Steinmeier, Thomas L., Behavioral Effects of Social Security Policies on Benefit Claiming, Retirement and Saving (August 1, 2012). Michigan Retirement Research Center Research Paper No. 2012-263, Available at SSRN: https://ssrn.com/abstract=2148465 or http://dx.doi.org/10.2139/ssrn.2148465

Alan L. Gustman (Contact Author)

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography ( email )

Lubbock, TX 79409-2101
United States
806-742-2201 (Phone)

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