تاخیر در خواهان دریافت مزایای تامین اجتماعی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|24016||2002||29 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Public Economics, Volume 84, Issue 3, June 2002, Pages 357–385
This paper focuses on Social Security benefit claiming behavior, a take-up decision that has been ignored in the previous literature. Using financial calculations and simulations based on an expected utility maximization model, we show that delaying benefit claim for a period of time after retirement is optimal in a wide variety of cases and that gains from delay may be significant. We find that approximately 10% of men retiring before their 62nd birthday delay claiming for at least 1 year after eligibility. We estimate hazard and probit models using data from the New Beneficiary Data System to test four cross-sectional predictions. While the data suggest that too few men delay, we find that the pattern of delays by early retirees is generally consistent with the hypotheses generated by our theoretical model.
Social Security (SS) is the largest entitlement program in the United States today, providing income support for retired and disabled workers and their families. The concurrent growth in this program and decline in the labor force participation of older men has motivated an extensive literature investigating how SS influences retirement behavior. There is another large literature investigating the transfers induced by SS across and within cohorts. One common feature of the work in this area has been the assumption that individuals claim benefits as soon as they are eligible — either upon retirement, or upon turning age 62 if retirement is before that age. However, as with other social insurance programs, there is a take-up decision associated with claiming SS benefits. Individuals need not claim their benefits immediately upon retirement, or upon turning age 62. By delaying claiming, workers increase the benefits paid to them and their spouses, through the actuarial adjustment. As we demonstrate below, it is optimal in a wide variety of cases to delay claiming benefits for a period of time after eligibility. Moreover, for at least one group, men retiring before their 62nd birthday (the age of first eligibility for benefits), claiming delays are empirically important: roughly 10% of these retirees delay claiming for at least 1 year. This dynamic take-up consideration suggests that standard computations of both the retirement incentives of SS and the redistribution through SS may be biased. Moreover, we are not aware of any in-depth analysis of this take-up behavior. An examination of the extent to which observed claiming patterns are consistent with rational choice theory may have important implications for aspects of SS design and reform. The purpose of our paper is to investigate delays in SS benefits claiming and to explore their implications. We do so in five steps. First, in Section 1, we provide relevant institutional background on the SS program. We highlight the fact that retirement provides only a necessary, and not a sufficient, condition for receiving SS benefits.1 We briefly review the SS literature, emphasizing areas where realistic consideration of claiming behavior can affect analysis. In Section 2, we turn to a theoretical examination of claiming delays. We begin with a discussion of the benefit rules to explore how worker characteristics such as mortality expectations, wealth, age difference with spouse, and relative earnings of spouses may influence claiming delays. Then we use simulations of financial gains from delay to generate cross-sectional predictions that can be tested in our empirical analysis. We also present simulation results based on an expected utility maximization model with liquidity constraints, as we recognize that financial calculations in general understate the incentives to delay relative to the optimization of a risk averse utility function. This is because SS provides a real annuity valued by risk averse individuals with an uncertain date of death; individuals buy more of this annuity by delaying, so delays are more attractive with risk aversion. Section 3 presents evidence that claiming delays are empirically relevant. We use data from the New Beneficiary Data System (NBDS), a survey of SS claimants in the early 1980s. This survey provides administrative data on work and benefits histories which allows us to form a relatively precise measure of claiming delays. We highlight the differences in delays by early retirees, those retired before their 62nd birthday, and later retirees, those retiring after their 62nd birthday. We confirm our findings using more recent data from the Health and Retirement Survey (HRS). While we do not attempt to quantify the predicted prevalence of delayed claiming, delay appears to be far less prevalent than the theory predicts. Nevertheless, in Section 4, we investigate whether the claiming behavior of men in our sample is consistent with our cross-sectional predictions. We present both hazard and probit models of delays. We find support for three hypotheses. Specifically, we find that men with longer life expectancies have longer delays; that delays follow an inverse U-shaped pattern as wealth increases; and that men with younger spouses have longer delays. On the other hand, we do not find support for the prediction that single men should have shorter delays. Section 5 concludes by summarizing our findings and considering the implications for previous research on SS and for SS design and reform.
نتیجه گیری انگلیسی
While there is a large literature on take-up decisions for programs such as UI and AFDC, we are not aware of any previous analysis of SS claiming behavior as a take-up decision, despite the fact that SS dwarfs these programs in terms of annual expenditures and beneficiaries.28 Each year, roughly one million male and 750 000 female fully insured individuals reach age 62 and face choices of when to retire and when to claim SS benefits. Thus, understanding of the claiming decision is important for modeling of the impacts of this program.29 In addition, the SS take-up decision differs from that for UI or AFDC because it is completely a dynamic decision; the question is not whether to take up benefits, but when. In this paper, we first use financial calculations and simulations of an expected utility maximization model to estimate optimal delays and the gains from delay. We find that delays are optimal in a wide variety of cases and that gains are often significant. In the financial calculations, gains from delay are around 600% of PIA for married couples in our base case. The simulations of the expected utility maximization model for a single worker suggest that optimal delays are longer and that gains from delay may be 10 or more times larger when risk aversion is incorporated. While we find a much lower prevalence of delay empirically than the theoretical models suggest, we have nevertheless documented that delays are empirically important for early retirees, with approximately 10% of those retiring before age 62 delaying at least 1 year. By contrast, delays are fairly unimportant for later retirees. Moreover, our hazard, and probit modeling suggest that delays are largely consistent with the predictions of the theory. In particular, we find support for three hypotheses: men with longer life expectancies have longer delays; delays follow an inverse U-shaped pattern as wealth increases; and men with younger spouses have longer delays. Surprisingly, however, we do not find that married men have longer delays than single men. Perhaps differences in the claiming estimates across these groups are related to differences in the ability of these groups to self-insure against mortality risk and in their bequest motives. Our research has implications for the large literature on SS, in particular the estimation of retirement responses to SS and the computation of the distributional effects of the program. As we have discussed, the SS benefit level may be endogenous. Claiming appears to be influenced by factors such as health, wealth, wife’s age, and wife’s earnings which may also affect retirement propensities. Assuming that individuals claim benefits as soon as they retire overstates the benefit of continued work, as part of the benefit is available to those who retire by delaying claiming. Future work on retirement modeling can use our estimated claiming effects to correct their estimates for delayed claiming. Researchers studying the distributional effects of the program may also want to estimate such effects using both the PIA and the actual benefit level; the former shows patterns of redistribution inherent in the system conditional on everyone claiming at age 65, and comparing the latter to the former shows to what extent these patterns are altered by claiming behavior. We feel these issues are particularly relevant now, as the release of the HRS will certainly lead to a new round of research on Social Security. However, the simulations suggest that the fraction of early retirees claiming immediately at age 62 is much too large. Table 1 and Table 2 indicate that immediate claiming is only optimal for those with a much older wife, high mortality risk, or a high discount rate. Thus we suspect that part of the population simply claims immediately without sufficient consideration of intertemporal choice issues. This finding of heterogeneity in the SS population has implications for aspects of SS design and reform. For instance, it may affect the age at which benefits should first be made available, an issue that has been made more salient by the gradual increase in the NRA from 62 to 67. This finding may also raise concerns about the rationality of the savings decision, which is of great importance in the debate over SS reform. For all these reasons, we feel that claiming behavior should be better understood by those interested in Social Security.