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The effect of housing wealth shocks on work and retirement decisions

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  • Begley, Jaclene
  • Chan, Sewin

Abstract

Using panel data from 2000 to 2012, we show that unanticipated zip code-level shocks to home values affect retirement, retirement reversals, and Social Security claims. Among older men, homeowners experiencing moderately negative housing price shocks are less likely to retire, more likely to reverse retirement in some cases, and more likely to delay claiming Social Security relative to those experiencing positive shocks. We find similar responses among specific subgroups of older women, though not in general. Overall, our results imply that adverse housing shocks have substantial influence on labor market participation for older individuals.

Suggested Citation

  • Begley, Jaclene & Chan, Sewin, 2018. "The effect of housing wealth shocks on work and retirement decisions," Regional Science and Urban Economics, Elsevier, vol. 73(C), pages 180-195.
    • Handle: RePEc:eee:regeco:v:73:y:2018:i:c:p:180-195
    DOI: 10.1016/j.regsciurbeco.2018.10.001
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