Working Paper: NBER ID: w28721
Authors: Olivia S. Mitchell; Robert L. Clark; Annamaria Lusardi
Abstract: We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income.
Keywords: old-age income; retirement; financial stability; Health and Retirement Study
JEL Codes: D14; G53; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| initial income quartile (D31) | subsequent financial stability (G28) |
| social security and retirement savings (H55) | maintaining real income for low-income individuals during retirement (J26) |
| economic challenges (including shocks such as unemployment and health issues) (E24) | financial stability of low-income individuals (G51) |
| race (being Black or Hispanic) (J15) | being in the lowest income quartiles at baseline (I32) |
| gender (female) (J16) | being in the lowest income quartiles at baseline (I32) |
| education level (less educated) (I24) | being in the lowest income quartiles at baseline (I32) |
| marital status (non-married) (J12) | being in the lowest income quartiles at baseline (I32) |
| employment status (not working for pay) (J69) | being in the lowest income quartiles at baseline (I32) |
| disability status (J14) | being in the lowest income quartiles at baseline (I32) |
| having underage children at home (J13) | being in the lowest income quartiles at baseline (I32) |