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Unemployment and the Retirement Decisions of Older Workers

  • Paul Marmora

    ()

    (Department of Economics, Temple University)

  • Moritz Ritter

    ()

    (Department of Economics, Temple University)

This paper examines how unemployment late in workers' careers affects the timing of their retirement. Using data from the Survey of Income and Program Participation from 1996 to 2011, we document that unemployed workers permanently leave the labor force at a significantly higher rate than employed workers. This effect is stronger once workers become eligible for social security benefits and it is significantly dampened by the eligibility for unemployment insurance benefits. Unemployed workers, particularly those workers in households with below median wealth, also have a significantly higher social security uptake rate shortly after turning 62 than employed workers. We find little evidence for housing or stock market effects on the timing of retirement.

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File URL: http://www.cla.temple.edu/RePEc/documents/DETU_14_01.pdf
File Function: First version, 2014
Download Restriction: no

Paper provided by Department of Economics, Temple University in its series DETU Working Papers with number 1401.

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Date of creation: Jan 2014
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Handle: RePEc:tem:wpaper:1401
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Web page: http://www.cla.temple.edu/economics/

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  1. Courtney C. Coile & Phillip B. Levine, 2007. "Labor market shocks and retirement: Do government programs matter?," NBER Chapters, in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 1902-1919 National Bureau of Economic Research, Inc.
  2. Morris A. Davis & Jonathan Heathcote, 2004. "The price and quantity of residential land in the United States," Finance and Economics Discussion Series 2004-37, Board of Governors of the Federal Reserve System (U.S.).
  3. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo & Lawrence F. Katz, 2016. "Long-Term Unemployment and the Great Recession: The Role of Composition, Duration Dependence, and Nonparticipation," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages S7 - S54.
  4. Alan L. Gustman & Thomas L. Steinmeier, 2001. "Social Security, Pensions and Retirement Behavior Within the Family," Working Papers wp018, University of Michigan, Michigan Retirement Research Center.
  5. John L. Czajka & Jonathan E. Jacobson & Scott Cody, 2003. "Survey Estimates of Wealth A Comparative Analysis and Review of the Survey of Income and Program Participation," Mathematica Policy Research Reports 88337e2efc2c423dab80b5d00, Mathematica Policy Research.
  6. Hugo Benítez-Silva & J. Ignacio García-Pérez & Sergi Jiménez-Martín, 2011. "The effects of employment uncertainty and wealth shocks on the labor supply and claiming behavior of older American workers," Economics Working Papers 1275, Department of Economics and Business, Universitat Pompeu Fabra.
  7. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2011. "How Did the Recession of 2007-2009 Affect the Wealth and Retirement of the Near Retirement Age Population in the Health and Retirement Study?," NBER Working Papers 17547, National Bureau of Economic Research, Inc.
  8. José Ignacio García Pérez, 2010. "Retirement incentives, individual heterogeneity and labour transitions of employed and unemployed workers," Economic Working Papers at Centro de Estudios Andaluces E2010/12, Centro de Estudios Andaluces.
  9. 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..
  10. Sewin Chan & Ann Huff Stevens, 2002. "How Does Job Loss Affect the Timing of Retirement?," NBER Working Papers 8780, National Bureau of Economic Research, Inc.
  11. Tatsiramos, Konstantinos, 2010. "Job displacement and the transitions to re-employment and early retirement for non-employed older workers," European Economic Review, Elsevier, vol. 54(4), pages 517-535, May.
  12. Alan B. Krueger & Judd Cramer & David Cho, 2014. "Are the Long-Term Unemployed on the Margins of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 48(1 (Spring), pages 229-299.
  13. Sewin Chan & Ann Huff Stevens, 1999. "Employment and Retirement Following a Late Career Job Loss," Departmental Working Papers 199903, Rutgers University, Department of Economics.
  14. Purvi Sevak, 2002. "Wealth Shocks and Retirement Timing: Evidence from the Nineties," Working Papers wp027, University of Michigan, Michigan Retirement Research Center.
  15. Ing-Haw Cheng & Eric French, 2000. "The effect of the run-up in the stock market on labor supply," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 48-65.
  16. 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.
  17. Hugo Benitez-Silva & J. Ignacio Garcia-Perez & Sergi Jimenez-Martin Author-Email: sergi.jimenez@upf.edu, 2012. "The Effects of Employment Uncertainty and Wealth Shocks on the Labor Supply and Claiming Behavior of Older American Workers," Department of Economics Working Papers 12-12, Stony Brook University, Department of Economics.
  18. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
  19. Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2011. "What Explains Changes in Retirement Plans during the Great Recession?," American Economic Review, American Economic Association, vol. 101(3), pages 29-34, May.
  20. repec:mpr:mprres:3680 is not listed on IDEAS
  21. Rogowski, Jeannette & Karoly, Lynn, 2000. "Health insurance and retirement behavior: evidence from the health and retirement survey," Journal of Health Economics, Elsevier, vol. 19(4), pages 529-539, July.
  22. 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.
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