179 research outputs found
How Does Job Loss Affect the Timing of Retirement?
No full textWe use the Health and Retirement Study to examine the effects of job loss on factors affecting retirement incentives, including earnings, assets and pensions. We then estimate models of the retirement decision, which take into account the incentive to retire and any additional effects of displacement that are not captured by retirement incentives. There are substantial effects of displacement on retirement incentives as the result of changes to both earnings and pensions. Displacement significantly increases the probability of retirement, but only a small fraction of the displacement-induced changes in retirement behavior and labor force participation are the result of workers responding to these altered retirement incentives.
Retirement Incentives and Expectations
No full textThis paper investigates the responsiveness of individuals' retirement expectations to forward-looking measures of pension wealth accumulations. While most of the existing literature on retirement has used cross-sectional variation to identify the effects of pension and Social Security wealth on retirement behavior, we estimate fixed-effects regressions to control for unobserved heterogeneity that might be correlated with retirement plans and wealth. As expected, we find significant effects of future pension wealth accumulations on retirement expectations, but the magnitude of these effects differs substantially between OLS and fixed-effects estimation. Coefficients from fixed-effects estimation are at most half the magnitude of similar OLS regressions. Our results point to potentially large biases from the failure to control for unobserved heterogeneity in empirical models of retirement-related outcomes.
Retirement Wealth Across Cohorts: The Role of Earnings Inequality and Pension Changes
No full textChanges in labor markets over the past 30 years suggest upcoming changes in the distribution of wealth at retirement. Baby boom cohorts have spent the majority of their prime earnings years in a labor market with increased earnings inequality. This paper investigates how changes in lifetime earnings distributions affect the distribution of retirement wealth among cohorts retiring over the next decade. I use data from the Health and Retirement Study from 1992 to 2004 to estimate the relationship between lifetime earnings, pre-retirement private wealth and Social Security wealth. I show that changes in the lower half of the male earnings distribution explain a substantial portion of changes in the distribution of pre-retirement wealth. Growth in women’s earnings across the cohorts do not offset these declines in wealth associated with male earnings. When pensions are added to the measure of wealth, the role of earnings is even larger, reflecting a strong correlation between changes in earnings across these cohorts and changes in the values of their employer-provided pensions. These pension changes do not appear to operate via changes in pension structures (defined benefit versus defined contribution). The present value of wealth from future Social Security benefits, in contrast, grows in real terms throughout most of the distribution. At the bottom of the male distribution of Social Security wealth, reductions in lifetime earnings limit this growth in real benefits, while at the top of the distribution earnings growth amplifies expected growth in Social Security wealth.
What You Don't Know Can't Help You: Pension Knowledge and Retirement Decision Making
No full textThis paper provides an answer to an important empirical puzzle in the retirement literature: while most people know little about their own pension plans, retirement behavior is strongly affected by pension incentives. We combine administrative and self-reported pension data to measure the retirement response to actual and perceived financial incentives. We find that well-informed individuals are five times more responsive to pension incentives than the average individual when knowledge is ignored. We further find that the ill-informed individuals do respond to their own misperception of the incentives, rather than being unresponsive to any incentives.
Short-run Effects of Parental Job Loss on Children's Academic Achievement
No full textWe study the relationship between parental job loss and children’s academic achievement using data on job loss and grade retention from the 1996, 2001, and 2004 panels of the Survey of Income and Program Participation. We find that a parental job loss increases the probability of children’s grade retention by 0.8 percentage points, or around 15 percent. After conditioning on child fixed effects, there is no evidence of significantly increased grade retention prior to the job loss, suggesting a causal link between the parental employment shock and children’s academic difficulties. These effects are concentrated among children whose parents have a high school education or less.
What You Don’t Know Can’t Help You: Pension Knowledge and Retirement Decision Making
No full textThis paper provides an answer to an important empirical puzzle in the retirement
literature: while most people know little about their own pension plans, retirement behavior is
strongly affected by pension incentives. We combine administrative and self-reported pension
data to measure the retirement response to actual and perceived financial incentives. While
virtually all recent empirical work has relied on administrative- or employer-reported data, we
document an important role for self-reported pension data in determining retirement behavior.
Well-informed individuals are five times more responsive to pension incentives than the average.
In contrast, ill-informed individuals respond to their own misperceptions of the incentives rather
than being unresponsive to any measured incentives.pension plans, retirement behavior
The More Things Change, The More They Stay the Same: Trends in Long-term Employment in the United States, 1969-2002
No full textThis study considers whether there has been a decline in the attachment of workers and firms in the United States over the past several decades. Specifically, it compares snapshots of job tenure taken at the end of workers' careers from 1969 to 2002, using data from the Retirement History Survey, the National Longitudinal Survey of Older Men, and the Health and Retirement Study. The primary finding is one of stability in the prevalence of long-term employment relationships for men in the United States. In 1969, average tenure in the longest job for males aged 58-62 was 21.9 years. In 2002, the comparable figure was 21.4 years. Just over half of men ending their careers in 1969 had been with a single employer for at least 20 years; the same is true in 2002. This finding is robust to adjustments for minor differences in question details across data sources and for educational and retirement age changes over this time period.
Retirement Wealth Across Cohorts: The Role of Earnings Inequality and Pension Changes
No full textChanges in labor markets over the past 30 years suggest upcoming changes in the distribution of wealth at retirement. Baby boom cohorts have spent the majority of their prime earnings years in a labor market with increased earnings inequality. This paper investigates how changes in lifetime earnings distributions affect the distribution of retirement wealth among cohorts retiring over the next decade. I use data from the Health and Retirement Study from 1992 to 2004 to estimate the relationship between lifetime earnings, pre-retirement private wealth and Social Security wealth. I show that changes in the lower half of the male earnings distribution explain a substantial portion of changes in the distribution of pre-retirement wealth. Growth in women’s earnings across the cohorts do not offset these declines in wealth associated with male earnings. When pensions are added to the measure of wealth, the role of earnings is even larger, reflecting a strong correlation between changes in earnings across these cohorts and changes in the values of their employer-provided pensions. These pension changes do not appear to operate via changes in pension structures (defined benefit versus defined contribution). The present value of wealth from future Social Security benefits, in contrast, grows in real terms throughout most of the distribution. At the bottom of the male distribution of Social Security wealth, reductions in lifetime earnings limit this growth in real benefits, while at the top of the distribution earnings growth amplifies expected growth in Social Security wealth.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/61811/1/wp186.pd
Job Loss and Retirement Behavior of Older Men
No full textThis 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.
The Intergenerational Effects of Worker Displacement
No full textThis paper uses variation induced by firm closures to explore the
intergenerational effects of worker displacement. Using a Canadian panel of
administrative data that follows almost 60,000 father-child pairs from 1978 to 1999 and
includes detailed information about the firms at which the father worked, we construct
narrow treatment and control groups whose fathers had the same level of permanent
income prior to 1982 when some of the fathers were displaced. We demonstrate that job
loss leads to large permanent reductions in family income and small increases in mobility
and divorce. Comparing outcomes among individuals whose fathers experienced an
employment shock to outcomes among individuals whose fathers did not, we find that
children whose fathers were displaced have annual earnings about 9% lower than similar
children whose fathers did not experience an employment shock. They are also more
likely to receive unemployment insurance and social assistance. The estimates are driven
by the experiences of children whose family income was at the bottom of the income
distribution, and are robust to a number of specification checks.
This work was completed while Oreopoulos was a Statistics Canada Research Fellow and member of the
Family and Labour Studies Division of Statistics Canada. The financial support of the National Science
Foundation is gratefully acknowledged. We also wish to thank Miles Corak, and seminar participants at
Brown University, MIT, Princeton University, Stanford University, Yale University, the University of
California Berkeley, UCLA, the University of Toronto and the NBER summer institute for their helpful
comments.worker displacement
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