Volume 12 Issue 3 - January 2012
The Michigan Retirement Research Center website has been refreshed with the latest crop of working papers from the 2011 research projects. In the feature article for this issue, Olivia Mitchell uses evidence from the United States and abroad to address the topics of financial literacy and impatience and how they impact preparation for retirement. The Key Findings section highlights three recent working papers.
MRRC research scholars David Neumark and Joanne Song study the relation between the work environment and retirement behavior from a legal perspective. In states with the most comprehensive protections against age discrimination, the authors observe the greatest degree of response to financial inducements for longer careers. Economists frequently study tax and other financial factors affecting work incentives, but legal and social conditions merit close consideration as well.
Michael Hurd and Susann Rohwedder study responses of older Americans’ consumption expenditures to the recent financial crisis. Households over 65 seem more insulated than those 50-65, who are more often still in the labor market. Big ticket items, dining out, and housing tend to be among the most sensitive expenditure categories.
John Karl Scholz and Ananth Seshadri develop a dynamic, life-cycle model of health, saving, and consumption behavior. Short-term changes in the availability and cost of medical care may sometimes appear to have small effects. However, the authors emphasize that promoting and sustaining good health is an investment process.