Calculating Neutral Increases in Retirement Age by Socioeconomic Status

31 Pages Posted: 10 Sep 2015 Last revised: 18 Nov 2015

See all articles by Geoffrey Sanzenbacher

Geoffrey Sanzenbacher

Boston College Economics Department

Anthony Webb

Boston College - Center for Retirement Research

Candace Cosgrove

U.S. Census Bureau

Natalia Orlova

Boston College, Center for Retirement Research

Date Written: August 1, 2015

Abstract

As the gap between retirement resources and needs grows, many researchers have prescribed the antidote of working longer. But this prescription may disadvantage lower socioeconomic status (SES) households because they have shorter lives than higher-SES households, and working longer may increase existing disparities in retirement durations. This paper uses data from the National Longitudinal Mortality Study to quantity these disparities by SES since 1979, using education as a proxy for SES. The paper finds that age-65 life expectancies have increased for all levels of educational attainment but that the gains have been much greater for those in the top quartile. The paper uses these calculations to determine hypothetical retirement ages that hold constant for each SES group the 1979 ratios of time spent in retirement to time spent working. The findings suggest that all educational groups can work longer today than in the past, while spending a similar fraction of their lives in retirement; those in the top quartile of educational attainment can work a full one to two years longer than those in the bottom quartile and still maintain their 1979 ratios.

Suggested Citation

Sanzenbacher, Geoffrey and Webb, Anthony and Cosgrove, Candace and Orlova, Natalia, Calculating Neutral Increases in Retirement Age by Socioeconomic Status (August 1, 2015). Available at SSRN: https://ssrn.com/abstract=2658191 or http://dx.doi.org/10.2139/ssrn.2658191

Geoffrey Sanzenbacher (Contact Author)

Boston College Economics Department ( email )

United States

Anthony Webb

Boston College - Center for Retirement Research ( email )

Fulton Hall 550
Chestnut Hill, MA 02467
United States

Candace Cosgrove

U.S. Census Bureau ( email )

4600 Silver Hill Road
Suitland, MD 20746
United States

Natalia Orlova

Boston College, Center for Retirement Research ( email )

Boston, MA
United States

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