Informal Care Shocks and Social Security Claiming Behavior

Abstract

Long term care needs are growing in the U.S., given an aging population. More than two thirds of these needs are met informally through family members, including spouses and children, caring for their frail loved ones. However, this care arrangement may require re-adjustments in the retirement plans for older working children. Utilizing longitudinal data from the Heath and Retirement Study, we empirically show that parental informal care provision initiate both early retirement and Social Security claiming for married children providing care. At the same, we find that spouses of care providers delay benefit claiming and labor supply exits. We find no statistically significant effect of these caregiving shocks on the benefit claiming and labor supply outcomes of singles. Our findings indicate that married households are perhaps able to utilize the various Social Security spousal benefit claiming pathways, to maximize their joint household retirement benefits, in ways which single households are not.