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Housing wealth shocks, home equity withdrawal, and the claiming of Social Security retirement benefits
Author(s) -
Huang Naqun,
Li Jing,
Ross Amanda
Publication year - 2022
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.13058
Subject(s) - home equity , receipt , economics , social security , equity (law) , house price , boom , labour economics , monetary economics , environmental engineering , market economy , accounting , political science , law , engineering
Abstract This paper examines the impact of changes in house prices on when eligible individuals start receiving Social Security benefits. If house prices appreciate, financially constrained households may draw upon the additional home equity and delay receipt of Social Security. To address concerns that house price changes are correlated with unobserved local demand shocks, we use a control function approach and two different instrumental variables. We find that individuals delay Social Security claiming when house prices increase during the housing boom period. We also find that the total home loan amount increases, indicating households are drawing upon their home equity.