Retirement, Unretirement, and Housing Wealth during the Great Recession

TitleRetirement, Unretirement, and Housing Wealth during the Great Recession
Publication TypeJournal Article
Year of Publication2021
AuthorsZhao, L, Burge, G
JournalThe Journal of Real Estate Finance and Economics
ISBN Number1573-045X
KeywordsHousing wealth, property taxes, Retirement, unretirement

This paper explores the effect of housing wealth shocks and changes in property tax liabilities on the timing of retirement and unretirement (retirement reversals). Using longitudinal data from the Health and Retirement Study that spans the recent boom/bust cycle in the housing market, we exploit regional variation in the amplitude of housing price movements to identify the causal effect of unexpected housing wealth shocks, mitigating endogeneity concerns. We consistently find workers delay (hasten) retirement when they experience unexpected losses (gains) in housing wealth or have increased (decreased) property tax burdens. Extensions show these factors influence retirement reversals in the expected opposite directions. Importantly, we verify these effects remain even after controlling for early retirement expectations, providing additional evidence that the wealth shocks of the recent housing market cycle were unanticipated. Finally, we explore the nuanced role of gender and marital status in this context.

Citation Key10659