New paper: Have People Delayed Claiming Retirement Benefits?

CBO released a working paper (available here) by two of my very talented former SSA colleagues, Jae Song of Social Security's Office of Retirement and Disability Policy and Joyce Manchester, now of the Congressional Budget Office.

Here's the abstract:

Two changes have been made recently to rules governing the Social Security program: the retirement earnings test was eliminated in 2000 for people aged 65–69, and the full retirement age (FRA) for people born in 1938 or later was scheduled to gradually increase in two-month increments until reaching age 67. This paper examines changes in the age at which people claim Social Security retirement benefits in response to those changes. Data come from a 1 percent sample of administrative data from the Social Security Administration for 1997 to 2007.

Descriptive and regression analyses show that the largest effect of eliminating the earnings test in 2000 occurs at age 65. At that age, the proportion of people who claim retirement benefits increases by 4.6 percentage points among men and 2.4 percentage points among women. In addition, eliminating the earnings test significantly increases—by more than 20 percent—the benefit entitlement hazard for those turning the FRA (that is, the percentage of people who are newly entitled in a given year among those who are fully insured but were not previously entitled). Moreover, the response to the gradual increase in the FRA occurs not only among those who are close to the FRA but also among those who are close to the early retirement age.