What Explains Changes in Retirement Plans During the Great Recession?

6 Pages Posted: 2 Feb 2013

See all articles by Gopi Shah Goda

Gopi Shah Goda

Stanford University

John B. Shoven

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Sita N. Slavov

American Enterprise Institute; Occidental College - Department of Economics

Date Written: May 1, 2011

Abstract

We examine changes in subjective probabilities regarding retirement between the 2006 and 2008 waves of the Health and Retirement Study. Using a first-difference approach to eliminate individual heterogeneity, we find that the steep drop in asset prices in 2008 increased the reported probability of working at age 62 during the Great Recession. Increasing unemployment at least partly attenuated this effect, but subjective probabilities of working did not respond to changes in housing markets. Older workers' probabilities of working were more sensitive to fluctuations in the stock market, but less responsive to changes in labor market conditions.

Keywords: retirement, Great Recession, unemployment

Suggested Citation

Goda, Gopi Shah and Shoven, John B. and Slavov, Sita N., What Explains Changes in Retirement Plans During the Great Recession? (May 1, 2011). American Economic Review, Vol. 101, No. 3, 2011, Available at SSRN: https://ssrn.com/abstract=2210441

Gopi Shah Goda

Stanford University ( email )

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John B. Shoven

Stanford University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Sita N. Slavov (Contact Author)

American Enterprise Institute ( email )

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HOME PAGE: http://www.aei.org/scholar/sita-nataraj-slavov/

Occidental College - Department of Economics ( email )

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United States

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