Research

Job Market Paper

"The Old and The Dutiful: Stock Market Shocks and The Retirement Decision", Working Paper

Abstract: A simple life-cycle model suggests that a shock to assets inversely influences labor decisions for the retirement population. However, the literature finds weak and inconsistent evidence of this mechanism in the data. This paper proposes more accurate identifying assumptions to isolate this effect than is used in the previous literature and examines the retirement decision of near-retirement stockholders in the wake of a market crash using three episodes: the 2008 market crash, the 2000 downturn and market boom of the mid 90s. The treatment effect in a difference-in-differences setup is used to show that a large enough stock market bust causes a retirement delay, but a boom incentivizes neither early nor earlier retirement. My findings show that shocks of both high intensity and duration are capable of engendering delays of retirement.