Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/324772 
Year of Publication: 
2025
Series/Report no.: 
Upjohn Institute Working Paper No. 25-415
Publisher: 
W.E. Upjohn Institute for Employment Research, Kalamazoo, MI
Abstract: 
Do older workers change their labor supply in response to unexpected housing wealth losses (or gains)? Housing wealth is the largest component in most older Americans' portfolios, and they may seek to recoup losses by working longer to help smooth consumption in retirement. Despite its importance, prior studies have not arrived at a consensus answer. I perform three different analyses to re-approach this question using Health and Retirement Study (HRS) data: a descriptive analysis, two separate differences-in-differences-indifferences analyses exploiting the China Shock and the Great Recession, and an analysis employing autoregressive models for estimating unexpected shocks to housing price appreciation. All three analyses concur that older homeowners do not significantly change their labor supply or Social Security claiming behavior in response to unexpected housing wealth gains or losses. Subgroup analyses suggest that college-educated workers may be the most responsive, even though housing wealth makes up a lower share of their total wealth, probably due to their comparably greater employment resiliency in weak labor markets.
Subjects: 
older workers
labor supply
homeownership
Chinese import competition
JEL: 
J26
J22
J21
R23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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