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Bulls, bears, and retirement behavior

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Author Info
Courtney C. Coile
Phillip B. Levine
Abstract

The authors examine the relationship between stock market performance and retirement behavior. They first present a descriptive analysis of the wealth holdings of older households and simulate the labor supply response among stockholders necessary to generate observed retirement patterns. Few households, they find, have substantial stock holdings, and these holdings would have to be extremely responsive to market fluctuations to explain observed labor force patterns. The authors then exploit stock market fluctuations since the early 1980s (particularly the boom and bust between 1995 and 2002), along with variation in stock exposure, to generate a double quasi-experiment, comparing the retirement and labor force re-entry patterns over time of those more and less exposed to the market. Any difference in behavior that emerged during the boom should have reversed itself during the bust. The authors find no evidence that changes in the stock market drove aggregate trends in labor supply. (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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Publisher Info
Article provided by ILR Review, ILR School, Cornell University in its journal ILR Review.

Volume (Year): 59 (2006)
Issue (Month): 3 (April)
Pages: 408-429
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Handle: RePEc:ilr:articl:v:59:y:2006:i:3:p:408-429

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  1. Jeffrey R. Brown & Courtney C. Coile & Scott J. Weisbenner, 2006. "The Effect of Inheritance Receipt on Retirement," NBER Working Papers 12386, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Alicia H. Munnell & Steven A. Sass, 2007. "The Labor Supply of Older Americans," Working Papers, Center for Retirement Research at Boston College wp2007-12, Center for Retirement Research, revised Jun 2007. [Downloadable!]
    Other versions:
  3. Hallberg, Daniel, 2008. "Economic fluctuations and retirement of older employees," Working Paper Series 2008:2, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
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This page was last updated on 2008-8-26.


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