Health Shocks and Couples' Labor Supply Decisions

Unexpected health events such as a heart attack or new cancer diagnosis are very common for workers in their 50s and 60s. These health shocks can result in a significant loss in family income if the worker reduces labor supply, but the family can also protect itself against this loss if the worker's spouse increases labor supply, generating an "added worker effect." In this paper, I examine the effect of health shocks on the labor supply of both spouses using the Health and Retirement Study (HRS). I find that shocks lead the affected worker to reduce labor supply dramatically, particularly if the shock is accompanied by a loss of functioning. I also find that the added worker effect is small for men and that there is no such effect for women. There is some evidence to suggest that families respond to health shocks in predictable ways depending on characteristics such as access to retiree health insurance. The study concludes that health shocks result in real financial losses for families and are an important source of financial risk for older households.

Labor Market Shocks and Retirement: Do Government Programs Matter?

This paper examines how unemployment affects retirement and whether the Unemployment Insurance (UI) system and Social Security (SS) system affect how older workers respond to labor market shocks. To do so, we use pooled cross-sectional data from the March Current Population Survey (CPS) as well as March CPS files matched between one year and the next and longitudinal data from the Health and Retirement Survey (HRS). We find that downturns in the labor market increase retirement transitions. The magnitude of this effect is comparable to that associated with moderate changes in financial incentives to retire and to the threat of a health shock to which older workers are exposed. Interestingly, retirements only increase in response to an economic downturn once workers become SS-eligible, suggesting that retirement benefits may help alleviate the income loss associated with a weak labor market. We also estimate the impact of UI generosity on retirement and find little consistent evidence of an effect. This suggests that in some ways SS may serve as a more effective form of unemployment insurance for older workers than UI.

The Effect of Inheritance Receipt on Retirement

This paper uses the receipt of an inheritance to measure the effect of wealth shocks on retirement. Using the Health and Retirement Study (HRS), we first document that inheritance receipt is common among older workers %u2013 one in five households receives an inheritance over an eight-year period, with a median value of about $30,000. We find that inheritance receipt is associated with a significant increase in the probability of retirement. In particular, we find that receiving an inheritance increases the probability of retiring earlier than expected by 4.4 percentage points, or 12 percent relative to the baseline retirement rate, over an eight-year period. Importantly, this effect is stronger when the inheritance is unexpected and thus more likely to represent an exogenous shock to wealth.

Labor Market Shocks and Retirement: Do Government Programs Matter?

This paper examines how unemployment affects retirement and whether the Unemployment Insurance (UI) system and Social Security (SS) system affect how older workers respond to labor market shocks. To do so, we use pooled cross-sectional data from the March Current Population Survey (CPS) as well as March CPS files matched between one year and the next and longitudinal data from the Health and Retirement Survey (HRS). We find that downturns in the labor market increase retirement transitions. The magnitude of this effect is comparable to that associated with moderate changes in financial incentives to retire and to the threat of a health shock to which older workers are exposed. Interestingly, retirements only increase in response to an economic downturn once workers become SS-eligible, suggesting that retirement benefits may help alleviate the income loss associated with a weak labor market. We also estimate the impact of UI generosity on retirement and find little consistent evidence of an effect. This suggests that in some ways SS may serve as a more effective form of unemployment insurance for older workers than UI

The Market Crash and Mass Layoffs: How the Current Economic Crisis May Affect Retirement

Recent dramatic declines in U.S. stock and housing markets have led to widespread speculation that shrinking retirement accounts and falling home equity will lead workers to delay retirement. Yet the weakness in the labor market and its impact on retirement are often overlooked. If older job seekers have difficulty finding work, they may retire earlier than expected. The net effect of the current economic crisis on retirement is thus far from clear. In this paper, we use 30 years of data from the March Current Population Survey to estimate models relating retirement decisions to fluctuations in equity, housing, and labor markets. We find that workers age 62 to 69 are responsive to the unemployment rate and to long-run fluctuations in stock market returns. Less-educated workers are more sensitive to labor market conditions and more-educated workersare more sensitive to stock market conditions. We find no evidence that workers age 55 to 61 respond to these fluctuations or that workers at any age respond to fluctuating housing markets. On net, we predict that the increase in retirement attributable to the rising unemployment rate will be almost 50 percent larger than the decrease in retirement brought about by the stock market crash

Recessions, Reeling Markets, and Retiree Well-Being

This paper examines the impact of late-career investment returns and job loss on subsequent retiree well-being. Specifically, we explore whether there is a link between the income of retirees aged 70 to 79 and the stock market and labor market conditions that existed around the time of their retirement. We use data from the 2000 Census and the 2001 through 2007 American Community Surveys and consider both total personal income and income by type. We find that a long-term decline in the stock market in the years leading up to retirement leads to a modest reduction in investment income a decade or so later for those in the top third of the income distribution. The consequences of approaching retirement when the labor market is weak are more severe. A higher unemployment rate around the time of retirement reduces Social Security income for those in the bottom two-thirds of the income distribution; we estimate that an unemployed worker experiences a roughly 20 percent drop in Social Security income, consistent with claiming benefits several years early. Overall, our results indicate the importance of the challenges faced by lower-income workers who face a weak labor market as they approach retirement.

Low Susceptibility of Invasive Red Lionfish (Pterois volitans) to a Generalist Ectoparasite in Both Its Introduced and Native Ranges

Escape from parasites in their native range is one of many mechanisms that can contribute to the success of an invasive species. Gnathiid isopods are blood-feeding ectoparasites that infest a wide range of fish hosts, mostly in coral reef habitats. They are ecologically similar to terrestrial ticks, with the ability to transmit blood-borne parasites and cause damage or even death to heavily infected hosts. Therefore, being highly resistant or highly susceptible to gnathiids can have significant fitness consequences for reef-associated fishes. Indo-Pacific red lionfish (Pterois volitans) have invaded coastal habitats of the western tropical and subtropical Atlantic and Caribbean regions. We assessed the susceptibility of red lionfish to parasitic gnathiid isopods in both their native Pacific and introduced Atlantic ranges via experimental field studies during which lionfish and other, ecologically-similar reef fishes were caged and exposed to gnathiid infestation on shallow coral reefs. Lionfish in both ranges had very few gnathiids when compared with other species, suggesting that lionfish are not highly susceptible to infestation by generalist ectoparasitic gnathiids. While this pattern implies that release from gnathiid infestation is unlikely to contribute to the success of lionfish as invaders, it does suggest that in environments with high gnathiid densities, lionfish may have an advantage over species that are more susceptible to gnathiids. Also, because lionfish are not completely resistant to gnathiids, our results suggest that lionfish could possibly have transported blood parasites between their native Pacific and invaded Atlantic ranges

The effect of bleach duration and age on the ERG photostress test

Background: The ERG photostress test assesses the recovery of the focal 41 Hz ERG following exposure to a bright light that bleaches a significant proportion of photopigment. The aims of this study were: 1) to compare the repeatability of the ERG photostress test recovery time constant following long and short duration light exposure, and 2) to determine the effect of age on the ERG photostress test recovery time constant. Methods: Focal 41 Hz ERGs were recorded from 23 participants (age range 20–71 years) at 20-second intervals for 5 minutes following either a short-duration (photoflash) or long-duration (equilibrium) light exposure. After a 5-minute wash-out period, the procedure was repeated using the second bleach modality. The time constant of cone recovery was determined by fitting an exponential model to the amplitude recovery data. The whole procedure was repeated on a second occasion. The co-efficient of repeatability (CoR) was calculated for each bleaching technique. The relationship between the time constant of recovery and age was investigated (Pearson’s correlation coefficient). Results: The time constant of recovery following an equilibrium bleach was more repeatable than recovery following a photoflash (CoR = 85s and 184s respectively). Eight trials (from seven participants) failed to show a reduction in amplitude following the photoflash, suggesting that a blink or fixation loss had occurred. All participants were reliably light-adapted by the equilibrium bleach. For the equilibrium bleach data, the time constant of recovery increased with age at a rate of 27 seconds per decade. Conclusions: The equilibrium bleach was more reliable and repeatable than the photoflash. Increasing participant age was shown to result in a lengthening of the recovery time constant, of a magnitude comparable to previously published psychophysical data

HOW THE GROWING GAP IN LIFE EXPECTANCY MAY AFFECT RETIREMENT BENEFITS AND REFORMS.

Older Americans have experienced dramatic gains in life expectancy in recent decades, but an emerging literature reveals that these gains are accumulating mostly to those at the top of the income distribution. We explore how growing inequality in life expectancy affects lifetime benefits from Social Security, Medicare, and other programs and how this phenomenon interacts with possible program reforms. We first project that life expectancy at age 50 for males in the two highest income quintiles will rise by 7 to 8 years between the 1930 and 1960 birth cohorts, but that the two lowest income quintiles will experience little to no increase over that time period. This divergence in life expectancy will cause the gap between average lifetime program benefits received by men in the highest and lowest quintiles to widen by $130,000 (in$2009) over this period. Finally we simulate the effect of Social Security reforms such as raising the normal retirement age and changing the benefit formula to see whether they mitigate or enhance the reduced progressivity resulting from the widening gap in life expectancy