Lifecycle Events and Their Consequences: Job Loss, Family Change, and Declines in Health - Rilegato

Rilegato

ISBN 10: 0804785856 ISBN 13: 9780804785853

Casa editrice: Stanford Economics & Finance, 2013

Riassunto

In Lifecycle Events and Their Consequences: Job Loss, Family Change, and Declines in Health, editors Kenneth A. Couch, Mary C. Daly, and Julie Zissimopoulos bring together leading scholars to study the impact of unexpected life course events on economic welfare. The contributions in this volume explore how job loss, the onset of health limitations, and changes in household structure can have a pronounced influence on individual and household well-being across the life course. Although these events are typically studied in isolation, they frequently co-occur or are otherwise interrelated. This book provides a systematic empirical overview of these sometimes uncertain events and their impact. By placing them in a unified analytical framework and approaching each of them from a similar perspective, Lifecycle Events and Their Consequences illustrates the importance of a coherent approach to thinking about the inter-relationships among these shifts. Finally, this volume aims to set the future research agenda in this important area.

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Informazioni sugli autori

Kenneth A. Couch is Professor of Economics at the University of Connecticut. Mary C. Daly is Group Vice President and the Associate Director of Research at the Federal Reserve Bank in San Francisco. Julie M. Zissimopoulos is Associate Professor at the University of Southern California and Associate Director of the Schaeffer Center for Health Policy and Economics.

Kenneth A. Couch is Professor of Economics at the University of Connecticut.Mary C. Daly is Group Vice President and the Associate Director of Research at the Federal Reserve Bank in San Francisco.Julie M. Zissimopoulos is Associate Professor at the University of Southern California and Associate Director of the Schaeffer Center for Health Policy and Economics.

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LIFECYCLE EVENTS AND THEIR CONSEQUENCES

Job Loss, Family Change, and Declines in Health

By Kenneth A. Couch, Mary C. Daly, Julie M. Zissimopoulos

Stanford University Press

Copyright © 2013 Board of Trustees of the Leland Stanford Junior University
All rights reserved.

ISBN: 978-0-8047-8585-3

Contents

Contributors...............................................................
ix
CHAPTER ONE Introduction Kenneth A. Couch, Mary C. Daly, and Julie M. 
Zissimopoulos..............................................................
1
PART I Job Loss............................................................
CHAPTER TWO Job Loss: Historical Perspective from the Displaced Workers 
Survey, 1984–2010 Henry S. Farber.........................................
11
CHAPTER THREE The Effect of Job Displacement on Cumulated Years Worked 
Till von Wachter, Jae Song, and Joyce Manchester...........................
34
CHAPTER FOUR Effects of Late-Life Job Loss on Wealth and Labor Supply 
Ann H. Stevens and Jeremy G. Moulton.......................................
57
CHAPTER FIVE Involuntary Job Transitions and Subjective Well-Being Ariel 
Kalil and Thomas DeLeire...................................................
76
CHAPTER SIX Job Loss: A Discussion Michael D. Hurd.......................
97
PART II Family Change......................................................
CHAPTER SEVEN Marriage Timing, Motherhood Timing, and Women's Well-Being 
in Retirement Amalia R. Miller............................................
109
CHAPTER EIGHT Divorce, Women's Earnings, and Retirement over the Life 
Course Kenneth A. Couch, Christopher R. Tamborini, Gayle L. Reznik, and 
John W. R. Phillips........................................................
133
CHAPTER NINE Marriage and Wealth Changes at Older Ages Julie M. 
Zissimopoulos..............................................................
158
CHAPTER TEN Family Structure and Financial Well-Being: Evidence from the 
Great Recession Juyeon Kim and Linda J. Waite.............................
178
CHAPTER ELEVEN Family Structure Change: A Discussion Robert J. Willis....
202
PART III Declines in Health................................................
CHAPTER TWELVE Measuring the Population with Disabilities for Policy 
Analysis Richard V. Burkhauser, Andrew J. Houtenville, and Jennifer R. 
Tennant....................................................................
215
CHAPTER THIRTEEN The Economic Consequences of Disability: Evidence from 
the PSID Bruce D. Meyer and Wallace K. C. Mok.............................
240
CHAPTER FOURTEEN Health and Wealth in Early Retirement Geoffrey L. 
Wallace, Robert Haveman, Karen Holden, and Barbara Wolfe...................
260
CHAPTER FIFTEEN Disability and Subjective Well-Being Mary C. Daly and 
Colin S. Gardiner..........................................................
280
CHAPTER SIXTEEN Health Shocks: A Discussion Robert Haveman...............
301
Index......................................................................
311

CHAPTER 1

Introduction

Kenneth A. Couch, Mary C. Daly,and Julie M. Zissimopoulos

Negative events in peoples' lives can have profound effects on their lifecycleoutcomes. Events such as job loss, changes in family structure, anddeclines in health can reduce individuals' economic and noneconomicwell-being, leaving them permanently worse off than they were beforethe event, unable to regain their prior standing. The impact of theseshocks may not be limited to the individuals affected but can spill overto families and even to future generations, when children in affectedhouseholds have limited access to economic and emotional resources.

Understanding and documenting the impact of these commonlyencountered negative events is the focus of this book. Although theliterature on these topics is extensive, there have been few comprehensiveexaminations that bring together complementary interdisciplinaryanalyses on a range of negative lifecycle shocks. This book begins to fillthe gap with a collection of chapters authored by leading researchers ineconomics, demography, and sociology, all focused on three commonlifecycle events: involuntary job loss, changes in family structure, anddeclines in health or functioning.

A key contribution of the book is the construction of a researchframework that facilitates comparisons across various types of shocks.It is built around a set of key questions that are important for evaluatingthe individual and social costs of any lifecycle event. The questions are:

1. How likely are individuals to experience the event?

2. What are the short-term economic impacts?

3. What are the long-term economic impacts?

4. What are the noneconomic impacts?

For each of the lifecycle events studied, a chapter in the book examinesone or more of these key questions. This structure gives readers the abilityto compare these events in terms of the portion of the population affectedas well as the short- and long-term impact of these events on economicand noneconomic well-being. By addressing these four basic questions,the chapters in this volume provide a foundation for those interested inpursuing multidisciplinary research on one or all of these topics.

A second contribution of the book is the studies themselves, whichprovide excellent introductions to researchers and policymakers interestedin the consequences of lifecycle events. The collected chapters alsoshowcase the range of analysis being done by top academics and highlightsome of the emerging public data sources and statistical techniquesavailable to researchers interested in these issues. For example, severalof the papers draw on cross-sectional surveys that allow researchers todocument the importance of each type of risk in the population at a pointin time. Other chapters rely on data drawn from panel surveys that collectinformation on the same person over time, allowing researchers toanalyze the long-term impact of lifecycle disruptions on well-being. Stillothers use panel surveys linked to administrative records from governmentprograms that have only recently become available to researchers.The linkage of traditional survey information with administrative recordscollected by government agencies builds on the strengths of eachsource of information. The administrative records contain valuable information,such as the annual earnings of individuals, as well as privateand public retirement benefits untainted by the measurement error thatis common in self-reported data. The surveys contain information ondemographics and other life details not available in the administrativerecords. Using these combined data sources, researchers can accuratelytrack the impact that a variety of events have on people's lives over longperiods.

Of course there are many subjects the book does not address that bearnoting. A number of negative shocks are not examined by the authors.As noted earlier, the book focuses on the three highly prevalent eventsassociated with adverse impacts for which various public and privateinsurance and transfer schemes have been developed. Future researchagendas might focus on how other negative events compare to the onesdiscussed here. Another issue not taken up in this book is the impact ofthese negative events on children. This subject has received considerableattention of late as researchers attempt to understand the long-term impactof reduced parental income on children. While the findings in thisbook are suggestive of potential negative effects on children as a resultof reduced family income, a rigorous treatment is left for future research.Finally, there is emerging evidence that the negative events discussedhere are often interrelated, either because there is a higher risk for allevents among particular groups or because one event leads to another.A comprehensive treatment of these interrelationships is, again, beyondthe scope of this book, but the authors point out evidence for such interrelationshipswhen relevant.

GUIDE TO THE CHAPTERS IN THIS VOLUME

Job Loss: Chapters 2–6

In Chapter 2, Henry Farber discusses the incidence of job loss in theUnited States and examines the short-term impact on earnings followingreemployment. He finds that the incidence of displacement rises and fallswith the economy and that it was especially high during the recent severerecession. In contrast, the penalty for displacement varies less with economicconditions because displaced workers generally experience sharpearnings decreases following job loss. These results point to a substantialshort-term cost associated with job loss in the United States.

Chapter 3, by Till von Wachter, Jae Song, and Joyce Manchester,considers whether short-term losses experienced by displaced workerspersist over time. They find that workers released in mass layoffs experiencesignificant reductions in work activity in later life. Such reductionswill result in sizeable decreases in available resources both in workingage and in preparedness for retirement. The authors conclude that "displacementappears to be an extraordinary event shaping workers' long-termcumulated earnings" (p. 52).

The impact of job loss on the period of retirement is considered inmore detail in Chapter 4 by Ann Stevens and Jeremy Moulton. Theycompare retirement wealth for individuals who experience a job losswith those who do not and find sizeable differences, especially when thejob loss occurs at young ages. They find little evidence that displacedworkers can make up these differences by shifting retirement to a laterdate. The inability to recover appears related to both the difficulty inbecoming reemployed and, if a new job is found, working sufficientlylong before retirement to offset the initial declines in assets.

Lasting reductions in earnings and wealth due to job loss may haveconsequences on well-being beyond financial concerns. Chapter 5 byAriel Kalil and Thomas DeLeire examines the impact of job loss on twodifferent measures of self-reported psychological well-being, one meantto capture life satisfaction and another that gauges sense of purpose inlife. They find that job loss, independent of a variety of backgroundfactors, reduces satisfaction by roughly 25 to 50 percent and that self-assessmentof purpose in life decreases by roughly 15 percent. This worksuggests that job loss takes a toll on the nonfinancial as well as the financialwell-being of individuals.

In Chapter 6 Michael Hurd discusses these studies on job loss andsuggests interesting extensions to them.

Family Change: Chapters 7–11

In Chapter 7, Amalia Miller examines the impact of changing demographictrends in the timing of marriage and motherhood over the pastseveral decades on the earnings and assets of women and their spouses.Delaying a first birth appears to have a large and durable impact onwomen's earnings. Moreover, delay of marriage and childbirth altershousehold income. While these effects have only a modest impact onasset accumulation, they cumulate over time; thus, delay can have a lastingimpact on the economic well-being of women and their families overthe lifecycle.

The authors of Chapter 8, Kenneth Couch, Christopher Tamborini,Gayle Reznik, and John Phillips, examine the impact of divorce and remarriageon labor supply and Social Security retirement benefits amongwomen. They find that women who divorce and never remarry significantlyincrease their labor supply, and thus earnings, and retire later thanwomen who are continuously married or remarry after divorce. Takingspouses into account reveals that total Social Security retirement benefitsflowing to the households of women who experienced a divorce andnever remarried are much lower compared to those who either remarriedor were continuously married.

Julie Zissimopoulos examines the impact on net worth and savingsof changes in family structure at older ages in Chapter 9. Married coupleshave more wealth than unmarried individuals. While it is temptingto conclude that family structure is the primary determinant of wealthlevels near retirement, Zissimopoulos finds that higher lifetime earnings,lower mortality risk, and other factors also explain why married coupleshave higher wealth at older ages compared to unmarried individuals. Shefinds that changes in family structure at older ages do have an impacton wealth: divorce both splits and consumes wealth while remarriagerebuilds assets and divorce at all ages has negative and long-lasting consequenceson wealth accumulation.

In Chapter 10, Juyeon Kim and Linda Waite examine the influenceof changes in family size and complexity of living relationships on a family'seconomic well-being during the Great Recession. The authors findthat the average size of households did not change markedly followingthe Great Recession. However, the stable average conceals considerablechurning: about one-third of households added or lost members. Theauthors find that decreases in household size and complexity, on average,are associated with higher standards of living in the household for whitefamilies, no change for African American families, and a lower standardof living for Hispanic families. While families play an important role inproviding income support in difficult economic times, changes in livingarrangements that increase family size typically result in decreases ineconomic welfare.

Chapter 11 by Robert Willis reviews the chapters that consider theconsequences of changes in household structure, placing each in thebroader context of the field of family economics.

Declines in Health: Chapters 12–16

Richard Burkhauser, Andrew Houtenville, and Jennifer Tennant discuss,in Chapter 12, the conceptual and practical challenges of measuringthe prevalence of debilitating declines in health in the population. Theauthors show that decisions about measurement can have a significantimpact on estimates of the size and composition of the population affected.Using two nationally representative data sources, Burkhauser etal. show that no single question or measure captures everyone currentlytargeted by public policies for those with disabilities. Therefore, the authorsconclude that a combination of questions historically and currentlybeing used in U.S. surveys is optimal and represents best practice forresearchers interested in studying how declines in health affect employment,income, and public benefit receipt.

The authors of Chapter 13, Bruce Meyer and Wallace Mok, assessthe incidence of disability among working-age men and the impact it hason income and benefit receipt. The authors estimate that about 30 percentof men experience some form of disability and that the economicconsequences are similar to those experienced by displaced workers—substantiallylower earnings and income. For those who report chronic,severe disabilities, the costs are especially large and are not offset byincreased income from other sources. Thus, disability comes with economiccosts for the individual that are not offset by either governmentor family support.

In Chapter 14, Geoffrey Wallace, Robert Haveman, Karen Holden,and Barbara Wolfe consider how the onset of a physical or mental problemin functioning affects economic well-being during retirement. Theyexamine how reductions in physical and mental functioning relate to annuitizednet wealth. The authors find that difficulties with both mentaland physical functioning are associated with declines in wealth and thatthe impact is larger for single adults. This pattern is driven by individualsspending down resources to pay for health care and assistive services.

Mary Daly and Colin Gardiner examine the relationship betweendisability, its onset, and subjective well-being in Chapter 15. The authorsfind that having a work-limiting disability is associated with lower levelsof self-reported life satisfaction. Consistent with previous studies, theauthors find a negative relationship between disability status and subjectivewell-being. Although the effect of disability is somewhat mitigatedby employment, income and wealth, it emerges as a salient determinantof subjective well-being throughout the analysis.

Chapter 16 by Robert Haveman reviews the chapters in the sectionand highlights areas of research where further analysis is needed.

IDEAS FOR FUTURE RESEARCH

The chapters in this volume show that negative lifecycle events can havelarge and lasting effects on both the economic circumstances and healthof individuals and their families. Future research can take advantageof expanding data resources that allow researchers to trace individualsthroughout their lifetimes and follow their children as they age intoadulthood. Similar data for other countries also will be useful for improvingour understanding of how public programs and private institutionsamplify or attenuate losses associated with negative lifecycleshocks. Given the size of the consequences documented in this volume,continued research in this area is an important goal.

CHAPTER 2

Job Loss

Historical Perspective from the DisplacedWorkers Survey, 1984–2010

Henry S. Farber

INTRODUCTION

The Great Recession from December 2007 to June 2009 is associatedwith a dramatic weakening of the labor market, which is now onlyslowly recovering. The unemployment rate remains stubbornly high, anddurations of unemployment are unprecedentedly long. In this chapter Iuse the Displaced Workers Survey (DWS), administered every two yearsfrom 1984–2010, as a supplement to the Current Population Survey(CPS), to examine the experiences of job losers in the Great Recessionand compare them to those of job losers in previous years, both in andout of recessions. The January 2010 DWS is of particular interest becauseit covers job loss during the Great Recession (2007–09).

An important concern in the aftermath of the recession is the highunemployment rate, which remained at 9.6 percent in the fourth quarterof 2010, more than one full year after the "official" end of the recessionin June 2009. The first panel of Figure 2.1 contains a plot of the quarterly,seasonally adjusted civilian unemployment rate from 1978 throughthe second quarter of 2011. Labor market conditions over the periodcovered by the DWS (1981–2009) have varied substantially. The early1980s saw a sharp increase in the unemployment rate to more than 10percent during the July 1981 to November 1982 recession. This increasewas followed by a long decline during the remainder of the 1980s. Theunemployment rate then increased to almost 8 percent in 1992 beforebeginning another long decline to about 4 percent in 2000. After thecomparatively mild recession in 2001 (when the unemployment rate was6 percent), the unemployment rate again declined to about 4.5 percent in2007 before increasing sharply to about 10 percent by early 2010. Sincethat time the unemployment rate has fallen slowly.

(Continues...)

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Dettagli dell'edizione

• Editore: Stanford Economics & Finance
• Data di pubblicazione: 2013
• Lingua: Inglese
• ISBN 10: 0804785856
• ISBN 13: 9780804785853
• Rilegatura: Copertina rigida
• Numero di pagine: 321
• Redattore: Couch Kenneth A., Daly Mary C., Zissimopoulos Julie M.
• Contatto del produttore: non disponibile
• Persona responsabile: non disponibile