Retirement Transitions: The role of shocks to household resources

TitleRetirement Transitions: The role of shocks to household resources
Publication TypeThesis
Year of Publication2004
AuthorsKim, S
Date Published2004
UniversityThe Ohio State University
CityUnited States -- Ohio
KeywordsHealth Conditions and Status, Healthcare, Methodology, Net Worth and Assets, Retirement Planning and Satisfaction
Abstract

The role of shocks to household resources in affecting retirement transitions among older employees was analyzed using data from the Health and Retirement Study (HRS). The transitions of reverse retirement and partial retirement were of particular interest. The objectives of the study were: 1) To explore how shocks, or unexpected changes to financial and human resources, affect retirement transitions, and 2) To explore the relative importance of shocks in making retirement transitions. The study sample consisted of 2,514 HRS respondents, born between 1926 and 1938, who changed employment status between 1998 and 2000 or between 2000 and 2002. A multinomial Logit model was used in order to make comparisons among the four retirement transition groups. The empirical model included institutional variables and demographic and environmental control variables. The results suggest that just as the paths to retirement are diverse and complex, so are their determinants. Shocks to financial resources had the largest effects on reverse retirement transitions. Shocks to human resources, including family structure and health, affected all retirement transitions. Institutional variables had the largest marginal effects on partial retirement. As expected, positive shocks to assets decreased the odds of reverse retirement, and negative income shocks had larger marginal effects on retirement transitions than positive income shocks. However, positive asset shocks had larger marginal effects on retirement transitions than negative asset shocks. The partial retirement group was distinguished from the reverse retirement group in terms of financial shock impacts; for members of the partial retirement group, rather than shocks to resources, institutional supports were key determinants. Fewer significant effects on the odds of partial retirement over traditional retirement were found, and the effects were smaller than those for reverse retirement and retirement from part-time employment in terms of their magnitudes. The loss of human resources was important across the transition groups, with greater impact of shock to marital status on women's labor force transitions compared to men's. To reduce shocks to household resources under uncertainty, retirement education should encompass information on asset allocation and financial risk. These topics may help workers more effectively plan for retirement.

URLhttps://search.proquest.com/openview/f7f4076a33407410a70e40feb8aa40c4/1?pq-origsite=gscholar&cbl=18750&diss=y
Endnote Keywords

Gerontology

Endnote ID

17660

Short TitleRetirement Transitions: The role of shocks to household resources
Citation Key6388