Late-career unemployment shocks, pension outcomes and unemployment insurance

Samir Elsadek Mahmoudi

Journal of Public Economics, 2023, vol. 218, issue C

Abstract: In response to unemployment shocks, older workers deplete their 401(k)s, particularly after the waiving of the early withdrawal penalty on unemployment-motivated withdrawals at age 55. This paper shows that unemployment insurance keeps older workers from depleting their 401(k) assets following job losses. Unemployment insurance also incentivizes older unemployed workers to delay claiming their Social Security benefits beyond the earliest age of eligibility, 62. Overall, unemployment insurance enhances the retirement income of the individuals having a history of late-career layoffs by helping them preserve their 401(k) assets, maintain the return on these assets and opt for a higher stream of Social Security benefits.

Keywords: Retirement Savings; Private Pensions; Social Security; Unemployment Insurance (search for similar items in EconPapers)
JEL-codes: G51 H24 H55 J14 J32 J65 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:218:y:2023:i:c:s0047272722001530

DOI: 10.1016/j.jpubeco.2022.104751

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