b'CHAPTER 1|WORKING LONGERclaiming and vice versa. Yet even with many oth- and FRA were raised. Many applicants, however,accounting for the trend toward longer working er explanations, time preference does not fullywould be too healthy to receive SSDI. lives. They compare members of the original HRS explain the spike in claiming at age 62. Includingcohort who were 51 to 56 in 1992 with the War subjective expectations about the potentialShift from Defined Benefit toBabies who were 51 to 56 in 1998 and the Early future insolvency of Social Security helps explainDefined Contribution Pensions Baby Boomers who were 51 to 56 in 2004.some of the spike at 62. The study also includesEmployer-provided DC pension plans allowThirty-nine percent of men in the original different hypothetical policy scenarios, showingworkers to save a certain amount in a retirementHRS cohort have a DB plan compared to 28% of that increasing the EEA by two years to 64 wouldaccount that can be drawn down at retirement.the War Babies and 21% of the Early Baby Boom-encourage more workers to remain inIn contrast, DB pension plans provide aners. DC plans increase from 29% to 49% across full-time employment. Why soannuity payment depending mostlythese cohorts. Trends are similar for women. many workers claim Socialon the type of job and years ofThese changes account for 68% of the increase in Security benefits as soonservice. Unlike savings in DCexpectations of working past 62 and 38% of the as they are available re- plans, DB payments typi- increase in expectations of working past 65.mains an open researchcally last until death. Their question with import- value is less dependentThe Role of Health Insuranceant bearing on policyon the performance ofPublic health insurance is available to low-income debates over increasingthe economy or the stockAmericans through Medicaid and becomes avail-the EEA. market than DC plans.able to all Americans at age 65 through Medicare. Proposals to in- As average life expectancyWhile the Affordable Care Act creates new routes crease the EEA raise con- increases and the size of theof access to health insurance, most private health cerns that this would leadretired and benefit-collectinginsurance is still provided through employers and to an increase in applicationspopulation grows, these plans arethus tied to employment. Many firms offer spou-for SSDI. Bound et al. (2010) com- less commonly offered, whilesincesal benefits and some offer retiree health insur-pare health care utilization patternstheir emergence in the 1980sDC plansance, especially to their early retirees up until age in four groups: SSDI recipients, rejected SSDIare increasingly the norm. HRS data contain a65 when Medicare is available. Taking these facts applicants who go on to claim EEA retirementdetailed accounting of both types of pensionand other features of the retirement landscape benefits, those who claim Social Security benefitsplans. into account, research using HRS data weighs the after EEA but before FRA, and those who claimSeveral studies with HRS data demonstrateeffects of health insurance on the retirement of Social Security retirement benefits at the FRA.that the availability of a DB pension has the effectindividuals as well as couples.Those who claim before their FRA are not quite asof lowering expectations of working longer (Mer- Retiree health insurance clearly influences healthy as those who delay claiming, but they aremin et al. 2007) and of encouraging workforce de- retirement. A study using data on men in the much healthier than SSDI recipients or rejectedparture (Cahill et al. 2012). Having a DC pensionHRS finds the presence of retiree health insur-SSDI applicants. Rejected applicants appear moreplan from the career job makes people more likelyance appears to provide a path to early retire-similar to SSDI recipients than to beneficiariesto return to work, but having a DB pension doesment for men in poor health (Blau and Gilleskie who never apply for SSDI benefits. There could benot (Cahill et al. 2011). 2008). In the original HRS cohort of men, a modest increase in SSDI applications if the EEAHurd and Rohwedder (2011) quantifyMarton and Woodbury (2010) find that retiree the effect of the shift from DB to DC plans inhealth insurance has the largest effect on the 31'