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Three little words? The impact of social security terminology on knowledge and claiming intentions
General Information
Title
Three little words? The impact of social security terminology on knowledge and claiming intentions
Author
Francisco Perez-Arce, Lila Rabinovich, Joanne Yoong and Laith Alattar
Publication Type
Journal paper
Outlet
Journal of Pension Economics and Finance
Year
2023
Abstract
We study the impact of changing the existing terminology to describe the rules governing Social Security retirement benefits. We provided respondents from a nationally representative online panel with information pertinent to the decision of when to claim Social Security retirement benefits. The content of the information treatments was identical for all respondents, but some were randomly given an alternative set of terms to refer to the key claiming ages (the experimental treatment group), while others were given the current terms (the control group). Despite the minimal nature of the change, there were significant differences in outcomes. Those in the treatment group spent less time reading the information, but their understanding of the Social Security program improved more than the control group. In addition, the treatment delayed retirement claiming intentions by an average of about two and a half months and increased the recommended claiming age to vignette characters by a similar magnitude. The effects were particularly strong for those with low levels of financial literacy. The relative gains in knowledge persisted several months after the treatment.