Early Retirement and the Reallocation of Time: Evidence from Social Security Eligibility at Age 62 A Methodological Demonstration with Simulated Data

Abstract

At age 62, Americans become eligible for Social Security early retirement benefits, triggering substantial labor force exit. While prior research documents employment effects, we know remarkably little about how newly retired individuals reallocate their daily time. Using simulated data calibrated to match published American Time Use Survey statistics, we demonstrate how a regression discontinuity design can estimate the full 24-hour time budget changes at the age-62 eligibility threshold. Our simulated analysis suggests that eligibility would increase retirement probability by approximately 13 percentage points. Newly eligible individuals would reduce work time by roughly 42 minutes per day, with the freed time flowing primarily to passive leisure (television viewing), sleep, and household production. Active leisure (exercise) would increase only marginally. These patterns—dominated by sedentary activities—could help explain prior findings that retirement increases mortality. This paper serves as a methodological demonstration; replication with actual ATUS microdata is needed to confirm these patterns.