How Do High-Pressure Labor Markets Affect the Retirement Security of Low Earners?

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Stipica Mudrazija and Barbara A. Butrica, Urban Institute

While existing research has documented the negative consequences of economic downturns and high unemployment on the long-term financial well-being of workers, it has largely overlooked the impact that tight labor markets may have on low-income workers. Using data from the Panel Study of Income Dynamics and the Health and Retirement Study, this project will assess the impact of high-pressure labor markets during economic expansions on the labor market outcomes of low-income workers, the extent to which these effects dissipate during subsequent high-unemployment periods, and the lifetime effects on future retirement security. These results would improve SSA’s understanding of the connection between economic cycles and the long-term employment prospects and earnings of the most vulnerable beneficiaries.