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

Authors

• Elizabeth Powers
• David Neumark

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.

Citation

This MRRC working paper was subsequently published as:

Powers, Elizabeth T., and Neumark, David. “The Supplemental Security Income Program and Incentives to Claim Social Security Retirement Early.” 58 National Tax Journal 5-26 (March 2005).

Elder, Todd E., and Powers, Elizabeth T. "The Incredible Shrinking Program:  Will Cash Welfare for the Elderly Disappear?" Research on Aging 28, no.3 (May 2006): 341-358.

Full Text

Download PDF

Project

• UM02-13: Multiple Program Use by Older Americans: Social Security, Early Retirement, and Supplemental Security Income

Paper ID

WP 2003-036

Publication Type

Working Paper

Publication Year

2003