The Effect of Early Claiming Benefit Reduction on Retirement Rates

Mobile Share Email Facebook Twitter LinkedIn

This paper examines the effect of the increase in the Social Security Full Retirement Age (FRA) and the associated decrease in benefits for early claimants on retirement rates at ages 62 to 65. It uses information on age, sex, and labor force participation from the monthly Current Population Survey from 1976 to 2019. Critical components of the analysis include a difference-in-difference framework, comparison of three measures of retirement status, estimation of nonparametric and parametric models, and a test of the assumptions underlying the difference-in-difference approach. Although our model satisfied that test, the results do not guarantee that our specification is valid.