Does Household Debt Influence the Labor Supply and Benefit Claiming Decisions of Older Americans?

Published: 2013


More than half of all Social Security beneficiaries claim their benefits before reaching full retirement age, which has important implications for individual retirement income security and for the Social Security program itself. Whereas previous studies have analyzed the determinants of early claiming and/or delayed retirement, none have examined how household debt or liquidity constraints might impact the labor supply and benefit claiming behavior of older individuals. This paper uses data from the Health and Retirement Study to fill this gap in the literature. Preliminary results suggest that having household debt, particularly in the form of outstanding mortgages, positively impacts older adults’ likelihood of delaying retirement and Social Security benefit receipt.

Key Findings