The Role Of Information For Retirement Behavior: Evidence Based On The Stepwise Introduction Of The Social Security Statement

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In 1995, the Social Security Administration started sending out the annual Social Security Statement. It contains information about the worker's estimated benefits at the ages 62, 65, and 70. The author uses this unique natural experiment to analyze the retirement and claiming decision making. The author finds that, despite the previous availability of information, the Statement has a significant impact on workers' knowledge about their benefits. These findings are consistent with a model where workers need to gather costly information in order to improve their retirement decision.