Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Economists Say Economic Crisis Will Cause More Retirements

12.10.2009
When the stock market and the housing market plummeted, many thought that decimated retirement accounts and lower home equity would force older workers to delay retirement. Instead, the economy may actually force many into retirement.

Wellesley College economists Courtney Coile and Phillip Levine have published a new paper, “The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement,” this month through the National Bureau of Economic Research.

The study is the subject of a story, “Gulf Between Rich and Poor Seniors Could Widen,” in Forbes Magazine.

“With the unemployment rate nearing 10 percent, some older workers may lose their jobs and be forced to retire earlier than expected,” Coile said.

The findings suggest that more people will retire early due to the rising unemployment rate than will delay retirement due to lost retirement savings resulting from the stock market crash.

“In fact, we predict that the increase in retirement brought about by the weak labor market will be about 50 percent larger than the decrease in retirement brought about by falling equity markets,” Coile said.

This runs counter to the perception, evident in dozens of stories in the press over the past year, that the main effect of the current economic crisis on retirement will be retirement delays.

“If anything, this understates the problem because different types of workers are affected by these market conditions,” Levine said. “Lower income workers are the ones who will be more likely to lose their jobs and be forced into retirement sooner. Higher income workers are the ones who will suffer stock losses and who may choose to work longer. In terms of their well-being in retirement, it is the low-income workers will be hurt more.”

The paper uses 30 years of data from the March Current Population Survey to estimate models relating retirement decisions to fluctuations in equity, housing, and labor markets.

Coile and Levine continue to investigate this issue, focusing on its impact on the well-being of individuals in their 70s, well after they have left the labor force. They are incorporating their work in a book, Reconsidering Retirement: How Losses and Layoffs Affect Older Workers, soon to be published by Brookings Press.

Since 1875, Wellesley College has been a leader in providing an excellent liberal arts education for women who will make a difference in the world. Its 500-acre campus near Boston is home to 2,300 undergraduate students from all 50 states and 68 countries. For more information, go to www.wellesley.edu. To read the story online, go to http://www.wellesley.edu/PublicAffairs/Releases/2009/100709.html.

Arlie Corday | Newswise Science News
Further information:
http://www.wellesley.edu

More articles from Business and Finance:

nachricht How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung

nachricht Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: How gut bacteria can make us ill

HZI researchers decipher infection mechanisms of Yersinia and immune responses of the host

Yersiniae cause severe intestinal infections. Studies using Yersinia pseudotuberculosis as a model organism aim to elucidate the infection mechanisms of these...

Im Focus: Interfacial Superconductivity: Magnetic and superconducting order revealed simultaneously

Researchers from the University of Hamburg in Germany, in collaboration with colleagues from the University of Aarhus in Denmark, have synthesized a new superconducting material by growing a few layers of an antiferromagnetic transition-metal chalcogenide on a bismuth-based topological insulator, both being non-superconducting materials.

While superconductivity and magnetism are generally believed to be mutually exclusive, surprisingly, in this new material, superconducting correlations...

Im Focus: Studying fundamental particles in materials

Laser-driving of semimetals allows creating novel quasiparticle states within condensed matter systems and switching between different states on ultrafast time scales

Studying properties of fundamental particles in condensed matter systems is a promising approach to quantum field theory. Quasiparticles offer the opportunity...

Im Focus: Designing Architecture with Solar Building Envelopes

Among the general public, solar thermal energy is currently associated with dark blue, rectangular collectors on building roofs. Technologies are needed for aesthetically high quality architecture which offer the architect more room for manoeuvre when it comes to low- and plus-energy buildings. With the “ArKol” project, researchers at Fraunhofer ISE together with partners are currently developing two façade collectors for solar thermal energy generation, which permit a high degree of design flexibility: a strip collector for opaque façade sections and a solar thermal blind for transparent sections. The current state of the two developments will be presented at the BAU 2017 trade fair.

As part of the “ArKol – development of architecturally highly integrated façade collectors with heat pipes” project, Fraunhofer ISE together with its partners...

Im Focus: How to inflate a hardened concrete shell with a weight of 80 t

At TU Wien, an alternative for resource intensive formwork for the construction of concrete domes was developed. It is now used in a test dome for the Austrian Federal Railways Infrastructure (ÖBB Infrastruktur).

Concrete shells are efficient structures, but not very resource efficient. The formwork for the construction of concrete domes alone requires a high amount of...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

12V, 48V, high-voltage – trends in E/E automotive architecture

10.01.2017 | Event News

2nd Conference on Non-Textual Information on 10 and 11 May 2017 in Hannover

09.01.2017 | Event News

Nothing will happen without batteries making it happen!

05.01.2017 | Event News

 
Latest News

A big nano boost for solar cells

18.01.2017 | Power and Electrical Engineering

Glass's off-kilter harmonies

18.01.2017 | Materials Sciences

Toward a 'smart' patch that automatically delivers insulin when needed

18.01.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>