Citation
Liebman, J., & Luttmer, E. (2011). Would people behave differently if they better understood Social Security? Evidence from a field experiment. National Bureau of Economic Research working paper no. 17287. Cambridge, MA: NBER.
Highlights
- The study’s objective was to examine the impact of providing information about Social Security rules and benefits on labor force participation, knowledge of Social Security, and claiming of Social Security benefits.
- Workers nearing retirement age were randomly assigned into either the treatment group, which was sent an informational brochure about Social Security and invited to a 15-minute web tutorial on Social Security provisions, or to the control group, which was not offered this information but could seek other publicly available information about Social Security. The authors measured outcomes through a follow-up survey conducted 13 months after random assignment.
- The study found that, on average, members of the treatment group were more likely to work for pay in the last month and were more likely to be aware that Social Security benefits were based on the number of years with the highest earnings, compared with the control group. However, there were no statistically significant differences between the two groups on any other outcomes related to earnings and employment, Social Security benefit receipt, or understanding Social Security rules.
- The quality of causal evidence presented in this report is moderate because it was based on a well-conducted randomized controlled trial with high attrition and adequate control variables. This means we are somewhat confident that the estimated effects are attributable to providing information about Social Security provisions, but other factors might also have contributed.
Features of the Study
The authors investigated whether a relatively low-cost intervention could impact workers’ knowledge of and choices associated with claiming Social Security benefits. Knowledge Networks, a data collection firm, identified participants for the study via random-digit dialing and collected a survey covering demographic and employment characteristics in November 2008.
To be eligible for the study, workers had to be 55 years of age or older, employed, and covered by Social Security at the time of random assignment. Approximately 90 percent of the sample was 60 to 65 years old. The 2,483 eligible individuals in the sample were randomly assigned to either the treatment or control group. Individuals randomly assigned to the treatment group were offered additional information about Social Security provisions in two ways: (1) an informational brochure that was mailed to them and (2) a 15-minute web tutorial. The brochure was generic and all members of the treatment group received the same version. The web tutorial was tailored to each individual, with specific examples that fit the characteristics of that individual, such as their age, gender, and length of time in the labor force. Individuals randomly assigned to the control group received no additional information, but could access other publicly available information about Social Security.
A follow-up survey was fielded from April to June 2010 to collect demographic and outcomes data for study participants. The authors estimated the impact of being offered additional information on Social Security provisions using regression analyses, controlling for demographic characteristics. The primary outcomes examined were labor force participation, claiming of Social Security benefits, hours worked and earned income, and multiple measures of understanding Social Security benefits rules and provisions.
Findings
- The study found that the treatment group was about four percentage points more likely to have worked for pay in the past month, compared with the control group; this difference was statistically significant. The study found no statistically significant differences between the treatment and control groups on earnings, hours worked, or Social Security benefit receipt.
- The study found that the treatment group was about six percentage points more likely to be aware that Social Security benefits were based on the number of years with the highest earnings, compared with the control group. This was a statistically significant difference. However, there were no statistically significant differences between the treatment and control groups on any other measures of understanding Social Security rules and provisions, or on the age at which individuals retired or started claiming Social Security benefits.
Considerations for Interpreting the Findings
Although the study design was a randomized controlled trial, the study had high attrition because not all study participants responded to the follow-up survey. Therefore, the study is not eligible to receive a high causal evidence rating. However, the authors demonstrated that the study groups included in the analysis had equivalent demographic characteristics, educational backgrounds, and household incomes. Therefore, the study receives a moderate causal evidence rating.
Only 33 percent of individuals in the treatment group recalled receiving the informational brochure. The low recall rate suggests that the informational brochure had not made much of an impression on study participants, which is further reflected in the few statistically significant impacts of the intervention. However, the intervention was also very low-cost, so even very small impacts may be cost-effective.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because it was based on a well-conducted randomized controlled trial with high attrition and adequate control variables. This means we are somewhat confident that the estimated effects are attributable to providing information about Social Security provisions, but other factors might also have contributed.