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Unemployment and the Retirement Decisions of Older Workers

Authors
  • Marmora, Paul1
  • Ritter, Moritz2
  • 1 Randolph–Macon College, Department of Economics and Business, Ashland, VA, 23005, USA , Ashland (United States)
  • 2 Temple University, Department of Economics, 1301 Cecil B. Moore Ave, Philadelphia, PA, 19122, USA , Philadelphia (United States)
Type
Published Article
Journal
Journal of Labor Research
Publisher
Springer US
Publication Date
Mar 31, 2015
Volume
36
Issue
3
Pages
274–290
Identifiers
DOI: 10.1007/s12122-015-9207-y
Source
Springer Nature
Keywords
License
Yellow

Abstract

This paper examines how unemployment late in workers’ careers affects retirement timing. Using data from the Survey of Income and Program Participation from 1996 to 2011, we document that unemployed workers permanently leave the labor force at a significantly higher rate than employed workers. This effect is stronger once workers become eligible for Social Security benefits. The effect of unemployment on retirement early in an unemployment spell is weaker for workers eligible for UI benefits. Unemployed workers, particularly those workers in households with below median wealth, also have a significantly higher rate of early Social Security uptake shortly after turning 62 relative to employed workers.

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