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Retirement, Unretirement, and Housing Wealth during the Great Recession

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  • Lingxiao Zhao

    (Southwestern University of Finance and Economics)

  • Gregory Burge

    (University of Oklahoma)

Abstract

This paper explores the effect of housing wealth shocks and changes in property tax liabilities on the timing of retirement and unretirement (retirement reversals). Using longitudinal data from the Health and Retirement Study that spans the recent boom/bust cycle in the housing market, we exploit regional variation in the amplitude of housing price movements to identify the causal effect of unexpected housing wealth shocks, mitigating endogeneity concerns. We consistently find workers delay (hasten) retirement when they experience unexpected losses (gains) in housing wealth or have increased (decreased) property tax burdens. Extensions show these factors influence retirement reversals in the expected opposite directions. Importantly, we verify these effects remain even after controlling for early retirement expectations, providing additional evidence that the wealth shocks of the recent housing market cycle were unanticipated. Finally, we explore the nuanced role of gender and marital status in this context.

Suggested Citation

  • Lingxiao Zhao & Gregory Burge, 2021. "Retirement, Unretirement, and Housing Wealth during the Great Recession," The Journal of Real Estate Finance and Economics, Springer, vol. 62(3), pages 342-369, April.
    • Handle: RePEc:kap:jrefec:v:62:y:2021:i:3:d:10.1007_s11146-020-09753-w
    DOI: 10.1007/s11146-020-09753-w
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    References listed on IDEAS

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    Cited by:

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    2. Huang, Naqun & Ning, Guangjie & Rong, Zhao, 2022. "Destination homeownership and labor force participation: Evidence from rural-to-urban migrants in China," Journal of Housing Economics, Elsevier, vol. 55(C).

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