The Great Recession and the Retirement Decisions of Older Workers

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To determine how asset values of older workers affect their future retirement decisions, it is important to take into account how asset values change over asset cycles.  This study uses Health and Retirement Study data from waves 1992 through 2010 together with restricted SSA data on geographic location to estimate a model of the age at first self-reported retirement for the subsample of married males.  The model covariates include demographic variables, workplace variables, non-housing financial wealth, and housing equity.  The proportional hazard estimates are, for the most part, significant and of the correct sign.  The estimated models suggest that declines in housing wealth during the Great Recession lowered retirement probabilities of married males by as much as 15 to 19 percent.  This delay was offset in cases where the household had defined benefit or defined contribution pensions.