The effects of employment uncertainty and wealth shocks on the labor supply and claiming behavior of older American workers

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• dc.contributor.author Benítez-Silva, Hugoca
• dc.contributor.author García-Pérez, José Ignacioca
• dc.contributor.author Jiménez-Martín, Sergica
• dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
• dc.date.accessioned 2017-07-26T10:50:12Z
• dc.date.available 2017-07-26T10:50:12Z
• dc.date.issued 2011-06-01
• dc.date.modified 2017-07-23T02:13:54Z
• dc.description.abstract Unemployment rates in developed countries have 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 likely increase the reliance that most older workers will have on public social insurance programs, exactly at a time that public finances are suffering from a large drop in contributions. Our paper explicitly accounts for employment uncertainty and unexpected wealth shocks, something that has been relatively overlooked in the literature, but that has grown in importance in recent years. 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. Our benchmark model explains with great accuracy the strikingly high proportion of individuals who claim benefits exactly at the Early Retirement Age, while still explaining the increased claiming hazard at the Normal Retirement Age. We also discuss some policy experiments and their interplay with employment uncertainty. Additionally, we analyze the effects of negative wealth shocks on the labor supply and claiming decisions of older Americans. Our results can explain why early claiming has remained very high in the last years even as the early retirement penalties have increased substantially compared with previous periods, and why labor force participation has remained quite high for older workers even in the midst of the worse employment crisis in decades.
• dc.format.mimetype application/pdfca
• dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1275
• dc.identifier.uri http://hdl.handle.net/10230/19876
• dc.language.iso eng
• dc.relation.ispartofseries Economics and Business Working Papers Series; 1275
• dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
• dc.subject.keyword employment uncertainty
• dc.subject.keyword wealth shocks
• dc.subject.keyword retirement
• dc.subject.keyword labor supply
• dc.subject.keyword life-cycle models
• dc.subject.keyword Labour, Public, Development and Health Economics
• dc.subject.keyword Statistics, Econometrics and Quantitative Methods
• dc.title The effects of employment uncertainty and wealth shocks on the labor supply and claiming behavior of older American workersca
• dc.type info:eu-repo/semantics/workingPaper