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Housing Wealth and Retirement Timing

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Author Info

  • Martin Farnham

    (University of Victoria)

  • Purvi Sevak

    (Hunter College)

Abstract

We use data from the Health and Retirement Study (HRS) and the Office of Housing Enterprise Oversight to measure the effect of changes in housing wealth on retirement timing. Using cross-MSA variation in house-price movements to identify wealth effects on retirement timing, we find evidence that such wealth effects are present. According to some specifications the rate of transition into retirement increases in the presence of positive housing wealth shocks. In addition, we use data on expected age of retirement to measure the impact of housing wealth shocks on expectations about retirement timing. Using renters as a control for heterogeneity in local amenities and using individual fixed effects to control for unobserved individual heterogeneity, we find that a 10% increase in housing wealth is associated with a reduction in expected retirement age of between 3.5 and 5 months.

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Bibliographic Info

Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp172.

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Length: 45 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:mrr:papers:wp172

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Cited by:
  1. Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2010. "Does Stock Market Performance Influence Retirement Intentions?," NBER Working Papers 16211, National Bureau of Economic Research, Inc.
  2. Hugo Benítez-Silva & Selcuk Eren & Frank Heiland & Sergi Jiménez-Martín, 2008. "How Well do Individuals Predict the Selling Prices of their Homes?," Working Papers 2008-10, FEDEA.
  3. James Marton & Stephen A. Woodbury, 2010. "The Influence of Retiree Health Benefits on Retirement Patterns," Upjohn Working Papers and Journal Articles 10-163, W.E. Upjohn Institute for Employment Research.
  4. Hui Shan, 2008. "Property taxes and elderly labor supply," Finance and Economics Discussion Series 2008-51, Board of Governors of the Federal Reserve System (U.S.).
  5. Richard Disney & John Gathergood, 2013. "House Prices, Wealth Effects and Labour Supply," Discussion Papers 13/02, University of Nottingham, School of Economics.

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