The long reach of education: Early retirement

Steven Venti and David A. Wise

The Journal of the Economics of Ageing, 2015, vol. 6, issue C, 133-148

Abstract: The goal of this paper is to draw attention to the long lasting effect of education on economic outcomes. We use the relationship between education and two routes to early retirement – the receipt of Social Security Disability Insurance (DI) and the early claiming of Social Security retirement benefits – to illustrate the long-lasting influence of education. We find that for both men and women with less than a high school degree the median DI participation rate is 6.6 times the participation rate for those with a college degree or more. Similarly, men and women with less than a high school education are over 25 percentage points more likely to claim Social Security benefits early than those with a college degree or more. We focus on four critical “pathways” through which education may indirectly influence early retirement – health, employment, earnings, and the accumulation of assets. We find that for women health is the dominant pathway through which education influences DI participation. For men, the health, earnings, and wealth pathways are of roughly equal magnitude. For both men and women the principal channel through which education influences early Social Security claiming decisions is the earnings pathway. We also consider the direct effect of education that does not operate through these pathways. The direct effect of education is much greater for early claiming of Social Security benefits than for DI participation, accounting for 72% of the effect of education for men and 67% for women. For women the direct effect of education on DI participation is not statistically significant, suggesting that the total effect may be through the four pathways.

Keywords: Education; Retirement; Disability Insurance; Social Security (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2212828X15000201

Related works:
Working Paper: The Long Reach of Education: Early Retirement (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:joecag:v:6:y:2015:i:c:p:133-148

DOI: 10.1016/j.jeoa.2015.08.001

Access Statistics for this article

The Journal of the Economics of Ageing is currently edited by D.E. Bloom, A. Sousa-Poza and U. Sunde

More articles in The Journal of the Economics of Ageing from Elsevier
Bibliographic data for series maintained by Catherine Liu ().