This project analyzes how past changes in the delayed retirement credit – the increase in the Social Security benefit rate that results from claiming at older ages – affected employment, earnings and claiming behavior. The delayed retirement credit was increased from just 3 percent per year for those born from 1918 to 1924 to 8 percent per year for those born in 1943 and later. The changes were phased-in gradually so that those born between 1925 and 1942 had actuarial adjustment rates between 3.5 and 7.5 percent per year. In addition to exploring the aggregate effects of the reform, the project analyzes whether responses varied by life expectancy, as proxied by lifetime income. Differential responses by income and life expectancy are important in assessing the impact of the reform, not just on beneficiaries, but on Social Security financial projections.
The Effect of the Delayed Retirement Credit on Social Security Claiming and Employment
Investigator: Mark Duggan (Stanford and NBER)
Labor force participation