LATE CAREER JOB LOSS AND THE DECISION TO RETIRE

• 成果类型: Article
• 署名作者: Merkurieva, Irina
• 署名单位: University of St Andrews
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12352
• 发表日期: 2019
• 页码: 259-282
• 关键词: health-insurance; social-security; earnings losses; BEHAVIOR; consumption; recessions; WEALTH; COSTS; plans; wages

摘要

This article provides an empirical analysis of the effect of involuntary job loss on the lifetime income and labor supply of older workers. I develop and estimate a dynamic programming model of retirement with savings, costly job search, and exogenous layoffs. The average cost of job loss is equivalent to one year of predisplacement earnings, 70% due to the wage reduction and 30% to the search frictions. Displaced workers on average retire 14 months earlier. Workers who approached retirement during the Great Recession will work approximately five months longer in response to the contemporaneous financial and labor market shocks.