Family First: How Elder Care Accelerates Social Security Claiming

• In Event: When Families Fill the Gaps: Intergenerational Support in Aging Societies

Abstract

As the U.S. population ages, millions of Americans face competing demands between their own retirement planning and caring for aging parents. While the labor market consequences of informal caregiving are well documented, including reduced hours, wage penalties, and workforce exit, less is known about how elder care shapes downstream financial security decisions, particularly the timing of Social Security claiming. Claiming early generates permanently reduced benefits, making it one of the most consequential financial choices older workers face.

Using Health and Retirement Study data from 1992 through 2022, I examine the causal effect of elder care provision on Social Security claiming decisions among older adults with at least one living parent. I measure caregiving using self-reported provision of assistance with activities of daily living, chores, or errands, and define early claiming as claiming before an individual's Full Retirement Age. To address endogeneity in caregiving (i.e., individuals in worse health or with fewer labor market options may be both more likely to provide care and more likely to claim early), I employ a Post-Lasso instrumental variables strategy. This approach exploits plausibly exogenous variation in elder care demand arising from parental health shocks and sibling sex composition, leveraging the well-documented pattern that care responsibilities fall disproportionately on daughters and on adults with fewer siblings. While OLS estimates suggest no effect, IV results indicate that caregivers claim Social Security more than a year earlier than non-caregivers, and are about 30 percent more likely to claim before their Full Retirement Age.

These findings carry significant implications for Social Security policy and retirement security. Early claiming driven by caregiving reflects a structural inequity in the current system: individuals who provide valuable informal care are penalized by permanently reduced retirement benefits. This penalty falls disproportionately on women, who provide elder care at twice the rate of men in our sample and already face greater retirement insecurity due to lower lifetime earnings and longer life expectancy. Policymakers should consider reforms that account for caregiving interruptions in Social Security benefit calculations, as well as expanded dependent care provisions and stronger protections against caregiver workforce exit. More broadly, as demographic trends intensify pressure on family networks, these findings underscore the urgency of understanding the consequences of caregiving on long-term financial security.

Author

• Grace Beata Brang, New York University
  Presenting Author