What Explains Changes in Retirement Plans during the Great Recession?
AbstractWe examine changes in subjective probabilities regarding retirement between the 2006 and 2008 waves of the Health and Retirement Study. Using a first-difference approach to eliminate individual heterogeneity, we find that the steep drop in asset prices in 2008 increased the reported probability of working at age 62 during the Great Recession. Increasing unemployment at least partly attenuated this effect, but subjective probabilities of working did not respond to changes in housing markets. Older workers' probabilities of working were more sensitive to fluctuations in the stock market, but less responsive to changes in labor market conditions.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 101 (2011)
Issue (Month): 3 (May)
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- Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2009. "How Do Pension Changes Affect Retirement Preparedness? The Trend to Defined Contribution Plans and the Vulnerability of the Retirement Age Population to the Stock Market Decline of 2008-2009," Working Papers wp206, University of Michigan, Michigan Retirement Research Center.
- Le Blanc, Julia & Scholl, Almuth, 2011. "Optimal savings for retirement: The role of individual accounts and disaster expectations," Discussion Paper Series 1: Economic Studies 2011,33, Deutsche Bundesbank, Research Centre.
- Crawford, Rowena, 2013. "The effect of the financial crisis on the retirement plans of older workers in England," Economics Letters, Elsevier, vol. 121(2), pages 156-159.
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