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Job Loss and Retirement Behavior of Older Men

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  • Sewin Chan
  • Ann Huff Stevens

Abstract

This paper uses data from the Health and Retirement Study to examine the employment and retirement behavior of men aged fifty and above who have experienced an involuntary job loss. Hazard models for returning to work and for exiting post-displacement employment are estimated and used to examine work patterns for ten years following a job loss. The findings show that a job loss results in large and lasting effects on future employment probabilities, and that these effects vary with the age of the worker. Displaced workers in their fifties are estimated to have a three in four chance of returning to work within two years after a job loss, whereas for a 62-year-old job loser, the probability is less than a third. Once re-employed, men 50 and above face significantly higher probabilities of exiting the workforce than do workers who have not experienced a recent job loss; however, the direction of this effect gradually reverses over time. The net outcome of these entry and exit rates is a substantial gap between the employment rates of men who have and have not lost jobs, that lasts at least seven years.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6920.

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Date of creation: Feb 1999
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Handle: RePEc:nbr:nberwo:6920

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  17. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1992. "Three Models of Retirement: Computational Complexity versus Predictive Validity," NBER Chapters, in: Topics in the Economics of Aging, pages 21-60 National Bureau of Economic Research, Inc.
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Citations

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Cited by:
  1. Disney, Richard & Whitehouse, Edward, 1999. "Pension plans and retirement incentives," Social Protection Discussion Papers 20851, The World Bank.
  2. Christopher J. O'Leary & Stephen A. Wandner, 2001. "Unemployment Compensation and Older Workers," Book chapters authored by Upjohn Institute researchers, W.E. Upjohn Institute for Employment Research.
  3. Purvi Sevak, 2002. "Wealth Shocks and Retirement Timing: Evidence from the Nineties," Working Papers wp027, University of Michigan, Michigan Retirement Research Center.
  4. Ann Huff Stevens & Sewin Chan, 1999. "Employment and Retirement Following a Late-Career Job Loss," American Economic Review, American Economic Association, vol. 89(2), pages 211-216, May.

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