This study examines the impact of job displacement on wealth holdings and wealth adequacy for older adults. This study uses data from the Health and Retirement Study from 1992 to 2010, a nationally representative longitudinal study of older American households aged 51 and over. The measures of wealth include net total wealth and subcomponents, such as the value of primary housing, other real estate, vehicles, businesses, individual retirement accounts, and financial wealth less the value of mortgages from primary residence and other home loans and outstanding debts. Financial wealth is composed of assets such as stocks, bonds, checking accounts as well as other savings accounts less outstanding debt.

The authors first estimate the impact of job loss on the total wealth and its subcomponents. The findings indicate that a typical worker experiences a persistent reduction in his or her wealth balances at a rate of 8 percent six or more years post job loss. Wealth shocks of this magnitude during the years leading up to retirement may jeopardize wealth adequacy during retirement. In an assessment of wealth adequacy, the authors find that job displacement can push more people into "near poverty". The authors compare household wealth to poverty by computing the ratio of household wealth to the actuarial present value of poverty lines. The findings indicate that 11.1 percent of the displaced survey respondents have poverty ratio between 1 and 1.5 as opposed to 7.8 percent of the not displaced survey respondents.