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full incentive structure of the system is properly modeled(mainly regarding the earnings test provisions),these proportions are much more consistent with thepredictions of a fully dynamic intertemporal model ofbehavior than previously thought (Benítez-Silva andHeiland 2007). 16Evidence on Claiming BehaviorTable 1 shows the proportion of individuals claimingSocial Security retirement benefits by age in the1994–2004 period, as well as the total number ofindividuals who claimed in a given year. The totalnumber of claimants used to compute the proportionsdoes not include the disability conversions at age 65(or the FRA if higher), but does include the relativelysmall number of individuals who claim at age 70 orolder (proportions not included in the table). 17Chart 1, which illustrates the data in Table 1,shows that the proportions of individuals claimingbenefits at different ages changed dramatically in2000, with a large drop in the proportion claiming atage 62 (from 50 percent to around 45 percent), but asharp increase in those claiming at age 65 or older.In 2000, the implementation of the FRA increasestarted, increases in the DRC continued, and theearnings test was repealed. Although the increase inthe FRA is unlikely to have much of an effect in thiscase, given that it only affected those turning age 62in 2000 who faced an increase in the FRA of only2 months, an explanation linked to the elimination ofthe earnings test seems much more reasonable. Also,although the proportions changed considerably, thenumber of individuals claiming retirement benefits byage (Table 2) did not change much, except for those atage 65 (by approximately 200,000 people if we look atthe aggregate data in the Supplement compared withthe previous periods for this age in the year 2000,which explains the large jump in the total number ofclaimants shown in Table 1) to age 69.These increases are larger than those described inSong (2004), but more in line with those described inSong and Manchester (2007a and 2007b), and suggestthat individuals reacted to the elimination of the earningstest quite sharply and in accordance with a policythat eliminates any link between claiming benefits andlabor earnings. These results are very much in linewith those recently reported in Song and Manchester(2007c), who using the same data focus on the claimingbehavior of individuals after the elimination ofthe earnings test for those above the FRA. 18 In theyears since that change, the proportions of individualsclaiming benefits at age 62 have risen even as the penaltyfor claiming early has become higher; the proportionclaiming at age 65 has stayed at higher levels. Inthe meantime the proportions of those claiming afterage 65 have returned to pre-2000 levels and even gonelower, suggesting a very small effect of the increasesin the DRC on claiming behavior. 19 This latter resultis in part surprising given the substantial increases inthe DRC in the past years and its level, suggesting thatalternative policies are necessary to convince individualsto claim benefits later and stay in the labor forcelonger. One possible reasonable explanation is that thelikely effects of the increases in the DRC have beenTable 1.Proportions of new claimants of Social Security retirement benefits, by age, 1994–2004Age 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 200462 0.523 0.512 0.511 0.518 0.518 0.503 0.452 0.490 0.483 0.487 0.49663 0.161 0.166 0.143 0.151 0.152 0.147 0.136 0.157 0.156 0.145 0.14364 0.074 0.069 0.064 0.063 0.068 0.067 0.060 0.069 0.070 0.069 0.06765 0.184 0.196 0.176 0.186 0.186 0.196 0.228 0.241 0.247 0.254 0.20166 0.018 0.020 0.023 0.021 0.021 0.027 0.043 0.009 0.011 0.011 0.07167 0.010 0.010 0.014 0.013 0.013 0.017 0.027 0.006 0.005 0.006 0.00468 0.008 0.007 0.009 0.009 0.009 0.011 0.018 0.005 0.004 0.005 0.00469 0.006 0.006 0.009 0.007 0.008 0.008 0.012 0.005 0.005 0.004 0.002Totalnumber 10,700 11,026 11,676 11,619 12,055 13,048 14,976 13,606 13,708 14,098 14,852SOURCE: OASDI public-use microdata file, 2004.NOTE: In the data, there is no way to separate disability converters from old-age claimants at age 65. What we have done is to assume aproportion of Social Security claimants from age-65 samples each year as disability converters. The proportions used are calculatedaccording to the Supplement .Social Security Bulletin • Vol. 69 • No. 3 • 2009 81