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The effects of health and wealth shocks on retirement decisions

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  • Dalton Conley
  • Jason Thompson

Abstract

Both health status and net worth can affect retirement decisions. In some cases, early retirement may be precipitated by a shock to an individual?s health and/or economic status. The authors examine how health and wealth shocks affect retirement decisions. They use data from the Panel Study of Income Dynamics to estimate a first-differences model of health and wealth shocks on retirement over the course of the 2000s in the United States. Their results suggest that acute health shocks are associated with labor market exits for older American men but not women. These results appear particularly strong for blacks, whose labor force participation seems particularly sensitive to health status, which may be due to different occupations for blacks and whites.

Suggested Citation

  • Dalton Conley & Jason Thompson, 2013. "The effects of health and wealth shocks on retirement decisions," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 389-404.
    • Handle: RePEc:fip:fedlrv:y:2013:i:september:p:389-404:n:v.95no.5
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    References listed on IDEAS

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    3. Pence Karen M., 2006. "The Role of Wealth Transformations: An Application to Estimating the Effect of Tax Incentives on Saving," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-26.
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    6. Eugenio Zucchelli & Andrew M. Jones & Nigel Rice & Anthony Harris, 2010. "The Effects of Health Shocks on labour Market Exits: Evidence from the HILDA Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(2), pages 191-218.
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    Cited by:

    1. Steven James Lee, 2021. "Does Fixed Income Buffer against Fraud Shocks?," JRFM, MDPI, vol. 14(10), pages 1-22, October.

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    Keywords

    Retirement; Wealth; Health;
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