RAND Behavioral Finance Webinar

Informative or Misleading? The Social Security Statement's Effects on Program Participation and Employment

by Philip Armour

In the mid-1990s, the Social Security Administration started automatically mailing personalized Statements with information on projected retirement benefits, coverage for disability benefits, and survivors' benefits. This video talk provides an overview of how information interventions like the Statement can affect behavior. Using a staggered introduction of the Statement to measure its effect on participation in Social Security programs as well as employment decisions, the discussed study showed that individual reactions were striking and varied: receipt of the Statement nearly doubled the likelihood of applying for Social Security Disability Insurance, but only among those already reporting a serious health condition. Although it did not have an effect on the claiming decision of Social Security retirement benefits, Statement receipt led to large changes in hours worked among older workers, with this latter effect appearing to be driven by a misunderstanding of the assumptions behind the Statement's projections.

This report is part of the RAND Corporation Presentation series. RAND presentations may include briefings related to a body of RAND research, videos of congressional testimonies, and a multimedia presentation on a topic or RAND capability. All RAND presentations represent RAND's commitment to quality and objectivity.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.