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The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files

Author

Listed:
  • Elizabeth T. Powers

    (The University of Illinois at Champaign-Urbana)

  • David Neumark

    (Michigan State University and National Bureau of Economic Research)

Abstract

Features of the Supplemental Security Income (SSI) program and the social security retirement system interact to create incentives for prospective participants in the aged portion of SSI to withdraw from the labor force and make an early old age insurance (OAI) claim under social security. This paper takes a first close look at this SSI-OAI interaction. The work disincentives posed by SSI rules and the potential interactions between the SSI and social security programs are outlined in a basic theoretical framework. The impact of SSI rules on the financial cost of delaying the initial OAI claim is calculated using earnings records of actual SSI recipients. Regression specifications for early OAI claims that include variables intended to capture the influence of SSI are estimated. Throughout, the analyses are enhanced by access to Social Security Administration records that have been matched to individuals in the Surveys of Income and Program Participation.

Suggested Citation

  • Elizabeth T. Powers & David Neumark, 2003. "The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early: Empirical Evidence from Matched SIPP and Social Security Administrative Files," Working Papers wp036, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp036
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    References listed on IDEAS

    as
    1. Neumark, David & Powers, Elizabeth, 2000. "Welfare for the elderly: the effects of SSI on pre-retirement labor supply," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 51-80, October.
    2. Jonathan Gruber & Peter Orszag, 1999. "What To Do About The Social Security Earnings Test?," Issues in Brief ib-1, Center for Retirement Research.
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    5. Yelowitz, Aaron S., 1998. "Why did the SSI-disabled program grow so much? Disentangling the effect of Medicaid," Journal of Health Economics, Elsevier, vol. 17(3), pages 321-349, June.
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    8. Aaron S. Yelowitz, 1995. "The Medicaid Notch, Labor Supply, and Welfare Participation: Evidence from Eligibility Expansions," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 909-939.
    9. Bowen Garrett & Sherry Glied, 2000. "Does state AFDC generosity affect child SSI participation?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 275-295.
    10. Elizabeth Powers & David Neumark, 2001. "The Supplemental Security Income Program and Incentives to Take Up Social Security Early Retirement: Empirical Evidence from Matched SIPP and Social.," NBER Working Papers 8670, National Bureau of Economic Research, Inc.
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    Cited by:

    1. David Neumark & Elizabeth T. Powers, 2005. "The Effects of Changes in State SSI Supplements on Preretirement Labor Supply," Public Finance Review, , vol. 33(1), pages 3-35, January.

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