The Effects of Employment Uncertainty, Unemployment Insurance, and Wealth Shocks on the Retirement Behavior of Older Americans

Hugo Benitez-Silva, J. Ignacio García-Pérez and Sergi Jimenez-Martin
Authors registered in the RePEc Author Service: J. Ignacio García Pérez ()

No 2015-06, Working Papers from FEDEA

Abstract: Unemployment rates in developed countries recently reached levels not seen in a generation, and workers of all ages are facing increasing probabilities of losing their jobs and considerable losses in accumulated assets. These events have increased the reliance that most (older) workers have on public social insurance programs, exactly at a time that public finances are suffering from a large drop in contributions. Using administrative and household level data, we empirically characterize a Life-Cycle model of retirement and claiming decisions in terms of the employment, wage, health, and mortality uncertainty faced by individuals. We analyze the role of three intertwined factors in the recent evolution of work and retirement benefits claiming behavior in the United States; namely, higher unemployment uncertainty, higher unemployment benefits, and wealth shocks. We find that higher employment uncertainty reduces work and increases early claiming, while higher unemployment benefits mildly reduce work and reduce claiming at early ages. Finally, negative wealth shocks increase both early claiming and work. When all these factors are combined, the final outcome is a mild decline in labor supply and relatively little variation in early claiming.

Date: 2015-04
New Economics Papers: this item is included in nep-age, nep-dge and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://documentos.fedea.net/pubs/dt/2015/dt-2015-06.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fda:fdaddt:2015-06

Access Statistics for this paper

More papers in Working Papers from FEDEA
Bibliographic data for series maintained by Carmen Arias ().