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Three Little Words? The Impact of Social Security Terminology.
General Information
Title
Three Little Words? The Impact of Social Security Terminology.
Author
Francisco Perez-Arce, Lila Rabinovich, Joanne Yoong and Laith Alattar
Publication Type
Working paper
Outlet
Center For Economic and Social Research
Year
2019
Abstract
We study the impact of changing the existing terminology used 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 in the control group. In addition, the treatment had the effect of delaying retirement claiming intentions by an average of about two and a half months. Respondents in the treatment group also were more likely to state they would advise standardized characters in hypothetical vignettes to claim later in life. Direct elicitation of all respondents’ preferences also revealed they thought the alternative terms were clearer. The relative gains in knowledge among those exposed to the alternative terms persisted several months after the treatment. These effects are stronger for those with low baseline levels of financial literacy.