Housing Wealth and Retirement Timing
AbstractWe 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 InfoPaper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp172.
Length: 45 pages
Date of creation: Oct 2007
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This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-01-26 (Economics of Ageing)
- NEP-ALL-2008-01-26 (All new papers)
- NEP-LAB-2008-01-26 (Labour Economics)
- NEP-URE-2008-01-26 (Urban & Real Estate Economics)
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