Policies to reduce the Social Security shortfalls and their impact on subjective expectations of future retirement benefits, employment and retirement behaviors, preferences and attitudes
Last registered on May 18, 2018

Pre-Trial

Trial Information
General Information
Title
Policies to reduce the Social Security shortfalls and their impact on subjective expectations of future retirement benefits, employment and retirement behaviors, preferences and attitudes
RCT ID
AEARCTR-0002941
Initial registration date
May 16, 2018
Last updated
May 18, 2018 11:32 AM EDT
Location(s)
Region
Primary Investigator
Affiliation
USC
Other Primary Investigator(s)
Additional Trial Information
Status
On going
Start date
2017-09-01
End date
2018-07-01
Secondary IDs
Abstract
The predicted shortfall in the Social Security trust fund will require policy changes such as reduction in retirement benefits, an increase of the payroll tax rate and/or of the “wage ceiling” (the upper limit on SS taxable income). It is thus important to understand the potential behavioral impacts of such policies.
Though the actual elasticities for saving, labor force participation and retirement depend on many factors, one important element is how policy-changes affect the expectations of Social Security benefit receipt. To some extent, people are aware of the predicted shortfalls in the Social Security system and thus already expect to receive lower amounts than those prescribed under current rules. Therefore, changes in the rules need may have no effect on expectations. For example, a reduction in social security benefits could have no impact on the expectations of those who had already internalized such reduction.
Understanding how people’s expectations would change in response to policy levers would be a useful input into studies of the likely behavioral responses of these policy changes. For instance, Kapteyn, Prados & Yoong (ongoing, KPY from now on) are currently studying how people make decisions on wealth accumulation and decumulation over the life span and how this may deviate from an “optimal” path of wealth over the life span (in terms of an individual’s own goals and expectations). The results of these combined studies would allow tracing back the behavioral effects of policy changes on private savings through their effects on subjective expectations. Furthermore, understanding whether these changes affect subjective expectations by themselves would be worthy on its own. For instance, Luttmer and Samwick (2017) show that the uncertainty of Social Security in itself reduces welfare. Thus, an important question is whether policy changes would reduce such uncertainty.
We field a survey on a internet-based representative panel, as a follow-up to respondents of an earlier survey. We present respondents with a series of “policy scenarios” where the government enacts alternative policy changes (such as increase in the tax rates, reduction of the benefits, and other). The order of the policy scenarios randomly differs across respondents. In each of these scenarios we measure respondents’ expectations. We compare expectations across the scenarios (within and across respondents) to present an estimate of how alternative policies would affect expectations. In addition, we randomize respondents into one of three treatment arms, that alter the baseline levels of information that each respondent has. The purpose of this randomization to test whether the impact of the scenarios on benefit expectations differ by the level of information of the respondents. However, the randomization will also be used in a separate paper to test for the impacts of information.
External Link(s)
Registration Citation
Citation
Perez-Arce, Francisco. 2018. "Policies to reduce the Social Security shortfalls and their impact on subjective expectations of future retirement benefits, employment and retirement behaviors, preferences and attitudes." AEA RCT Registry. May 18. https://www.socialscienceregistry.org/trials/2941/history/29694
Experimental Details
Interventions
Intervention(s)
We field a survey on a US-representative panel as a follow-up to respondents of an earlier survey (for whom we already had a baseline estimate of their expected retirement benefits). We present respondents with a series of “policy scenarios” where the government enacts alternative policy changes (such as increase in the tax rates, reduction of the benefits, and other). The order of the policy scenarios randomly differs across respondents. In each of these scenarios we measure respondents’ expectations using the method in the earlier study. We compare expectations across the scenarios (within and across respondents) to present an estimate of how alternative policies would affect expectations. In addition, we randomize respondents into one of three information treatment arms, that alter the baseline levels of information that each respondent has. The purpose of this randomization to test whether the impact of the scenarios on benefit expectations differ by the level of information of the respondents. However, the randomization will also be used in a separate paper to test for the impacts of information.



Intervention Start Date
2017-09-01
Intervention End Date
2018-07-01
Primary Outcomes
Primary Outcomes (end points)
1. Social Security Benefit Expectations.
2. Expected labor and retirement behaviors.
Primary Outcomes (explanation)
We will use the procedures developed in Kapteyn & Prados (ongoing) to estimate the distribution of Social Security Benefit expectations at retirement.
We also ask for direct questions on whether individuals expectations in terms of retirement, labor force participation and saving rates.
Secondary Outcomes
Secondary Outcomes (end points)
However, the information randomization will also be used in a separate paper for a different research question (to be analyzed in a separate paper) to test for the impacts of information treatments on policy preferences.
Policy Preferences and attitudes (this will be analyzed in separate study)
Secondary Outcomes (explanation)
The survey includes the questions on the folllowing items: 1) whether the respondents view inequality as a problem; 2) whether the respondent feel government should interfere to reduce disparities); 3) agree-disagree scale on whether the tax rate should be raised; 4) whether retirement benefits should be lowered; and 5) whether the income tax ceiling should be raised.
Experimental Design
Experimental Design
There are two levels of randomization. The first one is the order of the randomization of the different policy scenarios. All respondents will be asked to submit their benefit expectations under all the scenarios, but at a randomly different order (this will allow us to do cross-respondent comparisons to confirm the within-individual analyses).

The second level will be the randomization to iinformation treatments. This will allow to determine the heterogeneity of the impact of the policy scenario by levels of information (estimate whether the impact of the policy scenarios are different for respondents with high versus low levels of information).
Experimental Design Details
The main level of randomization (main in terms of the primary outcomes is the ordering of the different policy scenarios). That is, all respondents will be asked to submit their benefit expectations under the following scenarios: 1) social security payroll tax rates are increased; 2) general income tax rates (not SS payroll taxes) are raised; 3) wage ceiling is increased; 4) retirement benefits are reduced
Randomization Method
Randomization via survey software.
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
3,500 individuals
Sample size: planned number of observations
3,500 individuals
Sample size (or number of clusters) by treatment arms
1,166
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
University Park Institutional Review Board
IRB Approval Date
2017-10-23
IRB Approval Number
UP-14-00148-AM039
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers