Absence of conflict of interest.
Citation
Benítez-Silva, H., & Yin, N. (2009). An empirical study of the effects of Social Security reforms on benefit claiming behavior and receipt using public-use administrative microdata. Social Security Bulletin, 69(3), 77-95.
Highlights
- The study examined the impact of three policy changes to the Social Security program that went into effect in 2000 on average monthly benefits and the proportion of new claimants by age.
- The study was a nonexperimental analysis that examined outcomes for older workers by age and year using data from the 2004 Old Age, Survivors, and Disability Insurance program public-use microdata files.
- The study found that the changes were associated with lower average monthly benefits for individuals ages 66 to 69 after the year 2000 relative to individuals of the same ages in 1994.
- The quality of the causal evidence presented in this report is low because the authors did not demonstrate that the groups were similar before the intervention. This means we are not confident that the estimated effects are attributable to the intervention program; other factors are likely to have contributed.
Intervention Examined
Policy Changes to the Social Security Program
Features of the Intervention
The study intervention was a group of three policy changes to the Social Security program that were passed as part of a 1983 law and went into effect in 2000. First, the Full Retirement Age (FRA) was increased from age 65 to age 66 in two-month increments for each birth cohort from 1938 to 1943, and from age 66 to age 67 in two-month increments for each birth cohort from 1955 through 1960. Second, the earnings test for benefits was eliminated for individuals claiming benefits above the FRA. Finally, the Delayed Retirement Credit was increased for individuals claiming benefits after the FRA. The study analyzed the three changes together as one bundled intervention.
Features of the Study
The study was a nonexperimental analysis that examined the proportion of new claimants and average monthly benefit receipt by age and year, for individuals ages 62 to 69 and years 1994 to 2004. The authors compared monthly benefit receipt for these groups of individuals to monthly benefit receipt for individuals in 1994. Data were drawn from the 2004 Old Age, Survivors, and Disability Insurance program public-use microdata files. The microdata files included Social Security claiming and benefit data on individuals from a random sample of 1 percent of all Social Security recipients in 2004.
Findings
Public benefit receipt
- The Social Security changes were associated with lower average monthly benefits for individuals ages 66 to 69 after the year 2000 relative to individuals of the same ages in 1994.
Considerations for Interpreting the Findings
The authors did not demonstrate that the groups being compared were similar before the study and did not account for possible preexisting differences in the study’s analyses. Preexisting differences between the groups—and not the Social Security policy changes—could explain the observed differences in outcomes.
Causal Evidence Rating
The quality of causal evidence presented in this report is low because the authors did not demonstrate that the groups were similar before the intervention. This means we are not confident that the estimated effects are attributable to the three changes to the Social Security program; other factors are likely to have contributed.