The Supplemental Security Income Program and Incentives to Take Up Social Security Early Retirement: Empirical Evidence from Matched SIPP and Social

Elizabeth Powers and David Neumark

No 8670, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Features of the Supplemental Security Income (SSI) program and the social security retirement system may interact in a manner that creates incentives for prospective SSI recipients to take social security early retirement (SSER). This paper takes a first close look at this issue. The work disincentives posed by SSI rules and the potential interactions between the SSI and SSER programs are outlined in a basic theoretical framework. The hypotheses that emerge can be tested using public-use microdata linked to Social Security Administration records. We first present evidence supporting the hypothesis that SSI rules induce prospective SSI recipients to substantially reduce work activity (by various measures) prior to age 65. We then present two types of evidence on SSI-SSER interactions. We do not find a simple correspondence between generous SSI benefits and SSER use, which might be an expected indirect SSI-SSER interaction. However, estimates for some specifications for SSER receipt, derived directly from the theoretical interaction between SSER and SSI rules through the household budget constraint, provide evidence of a direct interaction between SSER and SSI, with SSI inducing use of SSER for those individuals for whom the SSI-SSER interaction eliminates the reduction in benefits associated with early receipt of social security benefits.

JEL-codes: J14 J18 (search for similar items in EconPapers)
Date: 2001-12
New Economics Papers: this item is included in nep-lab and nep-ltv
Note: AG LS PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Powers, Elizabeth T. and David Neumark. "The Supplemental Security Income Program And Incentives To Claim Social Security Retirement Early," National Tax Journal, 2005, v58(1,Mar), 5-26.

Downloads: (external link)
http://www.nber.org/papers/w8670.pdf (application/pdf)

Related works:
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:nbr:nberwo:8670

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w8670

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().