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Older Women's Labor Market Attachment, Retirement Planning, and Household Debt

In: Women Working Longer: Increased Employment at Older Ages

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  • Annamaria Lusardi
  • Olivia S. Mitchell

Abstract

The goal of this paper is to ascertain whether older women’s current and anticipated future labor force patterns have changed over time, and if so, to evaluate the factors associated with longer work lives and plans to continue work at older ages. Using data from both the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS), we show that older women’s current and intended future labor force attachment patterns are changing over time. Specifically, compared to our 1992 HRS baseline, more recent cohorts of women in their 50’s and 60s’s are more likely to plan to work longer. When we explore the reasons for delayed retirement among older women, factors include education, more marital disruption, and fewer children than prior cohorts. But household finances also play a key role, in that older women today have more debt than previously and are more financially fragile than in the past. The NFCS data show that factors associated with retirement planning include having more education and greater financial literacy. Those who report excessive amounts of debt and are financially fragile are the least financially literate, had more dependent children, and experienced income shocks. Thus shocks do play a role in older women’s debt status, but it is not enough to have resources: people also need the capacity to manage those resources if they are to stay out of debt as they head into retirement.
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Suggested Citation

  • Annamaria Lusardi & Olivia S. Mitchell, 2017. "Older Women's Labor Market Attachment, Retirement Planning, and Household Debt," NBER Chapters,in: Women Working Longer: Increased Employment at Older Ages, pages 185-215 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:13801
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    References listed on IDEAS

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    1. Barbara A. Butrica & Nadia S. Karamcheva, 2013. "Does Household Debt Influence the Labor Supply and Benefit Claiming Decisions of Older Americans?," Working Papers, Center for Retirement Research at Boston College wp2013-22, Center for Retirement Research.
    2. Annamaria Lusardi & Olivia S Mitchelli, 2007. "Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 42(1), pages 35-44, January.
    3. Lusardi, Annamaria & Tufano, Peter, 2015. "Debt literacy, financial experiences, and overindebtedness," Journal of Pension Economics and Finance, Cambridge University Press, vol. 14(04), pages 332-368, October.
    4. Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January.
    5. Annamaria Lusardi & Olivia Mitchell, 2006. "Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs," Working Papers wp144, University of Michigan, Michigan Retirement Research Center.
    6. David Rosnick & Dean Baker, 2014. "The Wealth of Households: An Analysis of the 2013 Survey of Consumer Finances," CEPR Reports and Issue Briefs 2014-16, Center for Economic and Policy Research (CEPR).
    7. Fortin, Nicole M, 1995. "Allocation Inflexibilities, Female Labor Supply, and Housing Assets Accumulation: Are Women Working to Pay the Mortgage?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 524-557, July.
    8. Martin Farnham & Purvi Sevak, 2016. "Housing Wealth and Retirement Timing," CESifo Economic Studies, CESifo, vol. 62(1), pages 26-46.
    9. Brian K. Bucks & Arthur B. Kennickell & Traci L. Mach & Kevin B. Moore, 2009. "Changes in U.S. family finances from 2004 to 2007: evidence from the Survey of Consumer Finances," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.).
    10. Annamaria Lusardi & Carlo de Bassa Scheresberg, 2013. "Financial Literacy and High-Cost Borrowing in the United States," NBER Working Papers 18969, National Bureau of Economic Research, Inc.
    11. Martin Farnham & Purvi Sevak, 2007. "Housing Wealth and Retirement Timing," Working Papers wp172, University of Michigan, Michigan Retirement Research Center.
    12. Mitchell, Olivia S. & Lusardi, Annamaria (ed.), 2011. "Financial Literacy: Implications for Retirement Security and the Financial Marketplace," OUP Catalogue, Oxford University Press, number 9780199696819.
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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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