Effect of Job Loss on Wealth Accumulation of Older Workers Final Report
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About the Report
The report describes a study where researchers examine the impact of job displacement on wealth holdings of older workers. Using data from the Health and Retirement Study, they measure the impact of job loss on the total wealth and its subcomponents. They find that a typical worker experiences a persistent reduction in his/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 their assessment of wealth adequacy, they find that job displacement can push more people into “near poverty”. They use the formulation of Love et al. (2007) to compare household wealth to poverty by computing the ratio of household wealth to the actuarial present value of poverty lines. They find that 11.1 percent of the displaced survey respondents have a poverty ratio between 1 and 1.5 as opposed to 7.8 percent of the not displaced survey respondents.
Research Gaps
- An important extension of this study is an addition of more years of data where comprehensive wealth measures can be used to analyze the effects of job displacement by conducting panel data analysis. (page 21)
Citation
Ozturk, G. B., Gallo, W. T. (2013). CUNY School of Public Health at Hunter College. Effect of Job Loss on Wealth Accumulation of Older Workers. Chief Evaluation Office, U.S. Department of Labor.
This study was part of the Department of Labor Scholars Program, and was produced outside of CEO’s standard research development process.