An Experimental Analysis of Modifications to the Survivor Benefit Information within the Social Security Statement

WP#2017-5

Abstract

This paper examines the effect of modifications to the survivor benefit information in the Social Security Statement on the benefit knowledge and the expected claiming behavior of married men using an experimental survey of workers from the RAND American Life Panel (ALP).  Critical components of this analysis include modifications to the survivor benefit information in the Statement’s benefit table and a “special insert” that explains the survivor benefit provisions.  The key limitations of this study include the limited generalizability of the results due to the sampling frame (i.e., men) and the self-selection of ALP panel members into the study.  Second, a worker’s claiming decision is likely the result of a more complicated decision-making process than was allowed for in this experiment.  Our study assumes, for example, that married workers evaluate their benefit information and make a decision about when to claim independent of input from their spouse.  While the occurrence and scope of such deliberations will vary by household, given the financial implications of this decision for each spouse, the assumption that married workers make this decision unilaterally is somewhat tenuous.

The paper found that:

  • Providing individuals with comprehensive and complex survivor benefit information improved their awareness and understanding of these provisions.
  • When workers are compelled to consider the effect that their claim age has on their survivor benefit, they appear to incorporate this into deciding when to claim. Each modification increased the expected claim ages of respondents by roughly one year relative to the control.
  • While it is possible to foster a deeper understanding of the complex interaction among survivor benefit provisions through an informational insert, this level of comprehension does not appear necessary to induce prosocial claiming behavior. Instead, it was sufficient for respondents to merely see that their spouse would receive a lower survivor benefit at lower claim ages.
  • The fade-out of the effects of the modifications considered in this analysis was rapid.

 
The policy implications of the findings are:

  • Respondents in this study were not well informed about the survivor benefit, suggesting that more detailed information may help married workers prepare financially for retirement and the transition into widowhood.
  • The finding that workers exposed to survivor benefit information were more likely to adjust their expected claim age suggests that they may not have already factored this information into their expectations and that it has value.
  • The rapid fade-out of the improvements in benefit knowledge and expected claiming behavior evident in this study has important practical implications and suggests that workers may benefit most if online information and mailed paper statements were treated as complements as opposed to substitutes.