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Older Women’s Labor Market Attachment, Retirement Planning, and Household Debt

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  • Annamaria Lusardi
  • Olivia S. Mitchell

Abstract

The goal of this paper is to ascertain whether older women’s current and anticipated future labor force patterns have changed over time, and if so, to evaluate the factors associated with longer work lives and plans to continue work at older ages. Using data from both the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS), we show that older women’s current and intended future labor force attachment patterns are changing over time. Specifically, compared to our 1992 HRS baseline, more recent cohorts of women in their 50’s and 60s’s are more likely to plan to work longer. When we explore the reasons for delayed retirement among older women, factors include education, more marital disruption, and fewer children than prior cohorts. But household finances also play a key role, in that older women today have more debt than previously and are more financially fragile than in the past. The NFCS data show that factors associated with retirement planning include having more education and greater financial literacy. Those who report excessive amounts of debt and are financially fragile are the least financially literate, had more dependent children, and experienced income shocks. Thus shocks do play a role in older women’s debt status, but it is not enough to have resources: people also need the capacity to manage those resources if they are to stay out of debt as they head into retirement.

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  • Annamaria Lusardi & Olivia S. Mitchell, 2016. "Older Women’s Labor Market Attachment, Retirement Planning, and Household Debt," NBER Working Papers 22606, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:22606
    Note: AG LS PE
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    Cited by:

    1. Youngwon Nam & Cäzilia Loibl, 2021. "Financial Capability and Financial Planning at the Verge of Retirement Age," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 133-150, March.
    2. Annamaria Lusardi & Olivia S. Mitchell & Noemi Oggero, 2020. "Debt and Financial Vulnerability on the Verge of Retirement," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(5), pages 1005-1034, August.
    3. Asyraf Afthanorhan & Abdullah Al Mamun & Noor Raihani Zainol & Hazimi Foziah & Zainudin Awang, 2020. "Framing the Retirement Planning Behavior Model towards Sustainable Wellbeing among Youth: The Moderating Effect of Public Profiles," Sustainability, MDPI, vol. 12(21), pages 1-24, October.
    4. Butrica, Barbara A. & Karamcheva, Nadia S, 2020. "Is Rising Household Debt Affecting Retirement Decisions?," IZA Discussion Papers 13182, Institute of Labor Economics (IZA).
    5. Anil Kumar & Che-Yuan Liang, 2024. "Labor Market Effects of Credit Constraints: Evidence from a Natural Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 16(3), pages 1-26, August.
    6. Kyoung Tae Kim & Somer G. Anderson & Martin C. Seay, 2019. "Financial Knowledge and Short-Term and Long-Term Financial Behaviors of Millennials in the United States," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 194-208, June.

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    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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