Recessions, Reeling Markets, and Retiree Well-Being
This paper examines the impact of late-career investment returns and job loss on subsequent retiree well-being. Specifically, we explore whether there is a link between the income of retirees aged 70 to 79 and the stock market and labor market conditions that existed around the time of their retirement. We use data from the 2000 Census and the 2001 through 2007 American Community Surveys and consider both total personal income and income by type. We find that a long-term decline in the stock market in the years leading up to retirement leads to a modest reduction in investment income a decade or so later for those in the top third of the income distribution. The consequences of approaching retirement when the labor market is weak are more severe. A higher unemployment rate around the time of retirement reduces Social Security income for those in the bottom two-thirds of the income distribution; we estimate that an unemployed worker experiences a roughly 20 percent drop in Social Security income, consistent with claiming benefits several years early. Overall, our results indicate the importance of the challenges faced by lower-income workers who face a weak labor market as they approach retirement.
|Date of creation:||Jun 2010|
|Date of revision:|
|Note:||AG LS PE CF|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicole Maestas, 2007. "Back to Work: Expectations and Realizations of Work after Retirement," Working Papers 196.2, RAND Corporation.
- Beaudry, Paul & DiNardo, John, 1991. "The Effect of Implicit Contracts on the Movement of Wages over the Business Cycle: Evidence from Micro Data," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 665-88, August.
- Henry S. Farber, 2005. "What do we know about Job Loss in the United States? Evidence from the Displaced Workers Survey, 1984-2004," Working Papers 877, Princeton University, Department of Economics, Industrial Relations Section..
- Sewin Chan & Ann Huff Stevens, 1999.
"Employment and Retirement Following a Late Career Job Loss,"
Departmental Working Papers
199903, Rutgers University, Department of Economics.
- 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.
- Gustman, Alan L. & Steinmeier, Thomas L. & Tabatabai, Nahid, 2010. "Pensions in the Health and Retirement Study," Economics Books, Harvard University Press, number 9780674048669.
- David A. Wise, 2004. "Introduction to "Perspectives on the Economics of Aging"," NBER Chapters, in: Perspectives on the Economics of Aging, pages 1-16 National Bureau of Economic Research, Inc.
- Courtney C. Coile & Phillip B. Levine, 2007.
"Labor market shocks and retirement: Do government programs matter?,"
in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 1902-1919
National Bureau of Economic Research, Inc.
- Coile, Courtney C. & Levine, Phillip B., 2007. "Labor market shocks and retirement: Do government programs matter?," Journal of Public Economics, Elsevier, vol. 91(10), pages 1902-1919, November.
- Courtney C. Coile & Phillip B. Levine, 2006. "Labor Market Shocks and Retirement: Do Government Programs Matter?," NBER Working Papers 12559, National Bureau of Economic Research, Inc.
- repec:pri:indrel:498 is not listed on IDEAS
- Alicia H. Munnell & Steven Sass & Mauricio Soto & Natalia Zhivan, 2006. "Has the Displacement of Older Workers Increased?," Working Papers, Center for Retirement Research at Boston College wp2006-17, Center for Retirement Research, revised Sep 2006.
- J. Trent Alexander & Michael Davern & Betsey Stevenson, 2010.
"Inaccurate age and sex data in the Census PUMS files: Evidence and Implications,"
NBER Working Papers
15703, National Bureau of Economic Research, Inc.
- J. Trent Alexander & Michael Davern & Betsey Stevenson, 2010. "Inaccurate Age and Sex Data in the Census PUMS Files: Evidence and Implications," CESifo Working Paper Series 2929, CESifo Group Munich.
- J. Trent Alexander & Michael Davern & Betsey Stevenson, 2010. "Inaccurate age and sex data in the Census PUMS files: evidence and implications," Working Paper Series 2010-03, Federal Reserve Bank of San Francisco.
- Hallberg, Daniel, 2008.
"Economic fluctuations and retirement of older employees,"
Working Paper Series
2008:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Daniel Hallberg, 2011. "Economic Fluctuations and Retirement of Older Employees," LABOUR, CEIS, vol. 25(3), pages 287-307, 09.
- David A. Wise, 2004. "Perspectives on the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise04-1.
- Henry S. Farber, 2005. "What do we know about job loss in the United States? evidence from the displaced workers survey, 1984-2004," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 13-28.
- Chan, Sewin & Stevens, Ann Huff, 2001. "Job Loss and Employment Patterns of Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 484-521, April.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:16066. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.