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Job Loss and Retirement

Author

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  • Nassal, Lea

    (University of Warwick)

Abstract

This paper provides the first evidence of the long-term effects of job loss on age at retirement, pension benefits and lifetime income. Exploiting plant closures and using German administrative data, I compare displaced workers with similar non-displaced workers. I show that displaced workers delay their retirement in response to the shock and ineligibility for early pension claims is the main driver of this response. Despite adjustments in retirement behavior, displaced workers face significant losses in pension benefits and lifetime income. Compared to similar non-displaced workers, displaced workers experience losses in the present discounted value of their lifetime income of 25%.

Suggested Citation

  • Nassal, Lea, 2025. "Job Loss and Retirement," The Warwick Economics Research Paper Series (TWERPS) 1565, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1565
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2025/twerp_1565-_nassal.pdf
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    Keywords

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    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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