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Research Details

UM16-09 - The Effect of Social Security Information on the Labor Supply of Older Americans

Philip Armour and Michael Lovenheim

Starting in the 1990s, SSA began automatic mailings of a statement with personalized projections and estimates as to Social Security benefit eligibility and amount. Although previous research has examined the impact of being sent this statement on retirement benefit claiming (no discernible effect) and Disability Insurance application (a large increase), there has been little research on the intensive-margin labor supply responses of older Americans. Preliminary research on this margin points to strong heterogeneity: older workers and/or spouses working more than 40 hours a week tend to reduce hours worked, with an opposite pattern for those working less than 20 hours a week. There is also evidence that workers misunderstood the statement's projections as accrued benefits that cannot fall, instead of projected benefits based on constant future earnings. Additional work with the HRS-SSA matched data will explore the dynamics of these labor market decisions, as well as low-earning spousal labor supply.

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