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Author: Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
In the first chapter I formulate a dynamic model of employment and saving decisions with costly job search and exogenous layoffs to study how late career job loss impacts the lifetime income and labor supply. I show that older displaced workers lose up to 7% of their remaining lifetime consumption, the loss being largely explained by the wage penalty. The cost of layoffs is highest for workers in the lowest three deciles of the wealth distribution and peaks for those laid off in their early sixties. While the majority of displaced workers reduce their lifetime labor supply in response to an involuntary job loss, up to 20% choose to work longer. The decision to postpone retirement is associated with higher pre-displacement wages. Workers who were approaching retirement at the onset of the Great Recession will increase their labor supply by approximately five months in response to the joint impact of changes in the value of household assets and the probabilities of losing and finding a job. In the second chapter I address the coordination of retirement timing in the households with two decision makers. I estimate a dynamic model of optimal retirement and labor supply decisions and find that leisure of husbands and wives are gross substitutes. The model generates a distribution of optimal retirement timing that closely mimics the outcomes observed in the sample. A counterfactual experiment indicates that coordination of retirement is much lower without family specific provisions of the Social Security Act. In the third chapter I estimate the consequences of job loss at older age on the household level. I show that older males whose spouses contributed at least 40% of the household earnings work 23% hours more a year after wife's job loss. This increase is comparable to the added worker effect for older females. I further propose a life-cycle model of labor supply, savings and job search decisions in two-member households with limited commitment. Simulations based on the model confirm that job loss of a spouse increases the lifetime labor supply. Estimated effects are positively related to the amount of lost earnings.
Author: Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
In the first chapter I formulate a dynamic model of employment and saving decisions with costly job search and exogenous layoffs to study how late career job loss impacts the lifetime income and labor supply. I show that older displaced workers lose up to 7% of their remaining lifetime consumption, the loss being largely explained by the wage penalty. The cost of layoffs is highest for workers in the lowest three deciles of the wealth distribution and peaks for those laid off in their early sixties. While the majority of displaced workers reduce their lifetime labor supply in response to an involuntary job loss, up to 20% choose to work longer. The decision to postpone retirement is associated with higher pre-displacement wages. Workers who were approaching retirement at the onset of the Great Recession will increase their labor supply by approximately five months in response to the joint impact of changes in the value of household assets and the probabilities of losing and finding a job. In the second chapter I address the coordination of retirement timing in the households with two decision makers. I estimate a dynamic model of optimal retirement and labor supply decisions and find that leisure of husbands and wives are gross substitutes. The model generates a distribution of optimal retirement timing that closely mimics the outcomes observed in the sample. A counterfactual experiment indicates that coordination of retirement is much lower without family specific provisions of the Social Security Act. In the third chapter I estimate the consequences of job loss at older age on the household level. I show that older males whose spouses contributed at least 40% of the household earnings work 23% hours more a year after wife's job loss. This increase is comparable to the added worker effect for older females. I further propose a life-cycle model of labor supply, savings and job search decisions in two-member households with limited commitment. Simulations based on the model confirm that job loss of a spouse increases the lifetime labor supply. Estimated effects are positively related to the amount of lost earnings.
Author: National Research Council Publisher: National Academies Press ISBN: 0309175259 Category : Social Science Languages : en Pages : 287
Book Description
This book brings together in one volume what researchers have learned about workers, employers, and retirees that is important for formulating retirement income policies. As the U.S. population ages, there is increasing uncertainty about the solvency of the Social Security and Medicare systems and the adequacy of private pensions to provide for people's retirement needs. The volume covers such critical behaviors as workers' decisions to retire, people's choices of saving over consumption, and employers' decisions about hiring older workers and providing pension and health care benefits. Also covered are trends in mortality, health status, and health care costs that are key to projecting the likely costs and effects of alternative retirement income security policies and a strategy for combining data and research knowledge into a policy modeling framework.
Author: Alan L. Gustman Publisher: ISBN: Category : Old age Languages : en Pages : 80
Book Description
This paper evaluates the extent to which current knowledge of retirement, savings, pension and related behavior is sufficient for determining the effects of major policy initiatives on the incomes and wealth of the aged population of the United States. Data are presented from two new surveys, the Health and Retirement Study and the Asset and Health Dynamics Among the Oldest Old Survey, describing the distributions of the major components of income and wealth to be explained by these behavioral models. The data suggest that the amount of wealth held by the older population has been severely understated in earlier surveys. Disagreements and inconsistencies in models of savings indicate that there is no agreed upon behavioral model upon which to base policy analysis. Similar problems characterize the pension literature. Most strikingly, central features of these three major branches of behavioral analysis are mutually inconsistent. Although there are important linkages among the behaviors determining retirement, savings and pension outcomes, research in each area ignores or misspecifies the related behavior from other areas. Consequently, significant advances are required before we can confidently predict the effects of contemplated changes in policies on income and wealth in retirement.
Author: Robin L. Lumsdaine Publisher: ISBN: Category : Aging Languages : en Pages : 72
Book Description
Empirical analysis often raises questions of approximation to underlying individual behavior. Closer approximation may require more complex statistical specifications, On the other hand, more complex specifications may presume computational facility that is beyond the grasp of most real people and therefore less consistent with the actual rules that govern their behavior, even though economic theory may push analysts to increasingly more complex specifications. Thus the issue is not only whether more complex models are worth the effort, but also whether they are better. We compare the in-sample and out-of-sample predictive performance of three models of retirement -- "option value," dynamic programming, and probit -- to determine which of the retirement rules most closely matches retirement behavior in a large firm. The primary measure of predictive validity is the correspondence between the model predictions and actual retirement under the firm's temporary early retirement window plan. The "option value" and dynamic programming models are considerably more successful than the less complex probit model in approximating the rules individuals use to make retirement decisions, but the more complex dynamic programming rule approximates behavior no better than the simpler option value rule
Author: National Research Council Publisher: National Academies Press ISBN: 0309175194 Category : Social Science Languages : en Pages : 256
Book Description
The retirement income security of older Americans and the cost of providing that security are increasingly the subject of major debate. This volume assesses what we know and recommends what we need to know to estimate the short- and long-term effects of policy alternatives. It details gaps in data and research and evaluates possible models to estimate the impact of policy changes that could affect retirement income from Social Security, pensions, personal savings, and other sources.
Author: Mo Wang Publisher: Oxford University Press ISBN: 0199746524 Category : Business & Economics Languages : en Pages : 660
Book Description
This handbook reviews existing theoretical perspectives and research findings on retirement, explores current and future challenges in retirement research and practice, and provides corresponding recommendations and suggestions.
Author: David A. Wise Publisher: University of Chicago Press ISBN: 0226903222 Category : Political Science Languages : en Pages : 428
Book Description
The Economics of Aging presents results from an ongoing National Bureau of Economic Research project. Contributors consider the housing mobility and living arrangements of the elderly, their labor force participation and retirement, the economics of their health care, and their financial status. The goal of the research is to further our understanding both of the factors that determine the well-being of the elderly and of the consequences that follow from an increasingly older population with longer individual life spans. Each paper is accompanied by critical commentary.
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Author: National Research Council
Author: Alan L. Gustman
Author: John Rust
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Author: Robin L. Lumsdaine
Author: National Research Council
Author: Mo Wang
Author: David A. Wise
Author: Clément Joubert