Steven A. Sass

Gradual Retirement, Sense of Control, and Retirees' Happiness

The aim of this study was to explore the factors that affect an individuals happiness while transitioning into retirement. Recent studies have found that workers often view the idea of gradual retirement as a more attractive alternative than a “cold turkey” or abrupt retirement. However, there is very little evidence as to whether phasing or cold turkey makes for a happier retirement. Using longitudinal data from the Health and Retirement Study, the authors explored what shapes the change in happiness between the last wave of full employment and the first wave of full retirement. The results suggest that what matters is not the type of transition (gradual retirement or cold turkey) but whether people perceive the transition as chosen or forced.

What Makes Retirees Happier: A Gradual or 'Cold Turkey' Retirement?

This study explores the factors that affect an individual’s happiness while transitioning into retirement. Recent studies highlight gradual retirement as an attractive option to older workers as they approach full retirement. However, it is not clear whether phasing or cold turkey makes for a happier retirement. Using longitudinal data from the Health and Retirement Study, this study explores what shapes the change in happiness between the last wave of full employment and the first wave of full retirement. Results suggest that what really matters is not the type of transition (gradual retirement or cold turkey), but whether people perceive the transition as chosen or forced.

The effect of job mobility on retirement timing by education

Job-changing among late-career workers increased steadily from the 1980s through the mid-2000s before declining somewhat in recent years. This study asks how the rise in job changing – which seems largely voluntary – affects retirement timing and whether this effect varies by a key measure of socioeconomic status: educational attainment. Workers presumably change jobs voluntarily to improve their well-being through gains in the economic or non-economic rewards of work or better working conditions. As a result, workers switching jobs late in their careers might retire later than they otherwise would have. Retiring later would be especially beneficial to less educated workers, who are generally less prepared financially to retire than better educated workers. Changing jobs, however, sheds the protection that tenure provides against involuntary job loss, which often leads to earlier retirements for older workers. This study seeks to understand which effect dominates, while dealing with the fact that job changing could be endogenous to retirement – that workers willing to bear the cost of a job search could intend to remain in the workforce longer. The analysis does so by controlling for each individual’s planned retirement age. The results show that the benefits of job changing are widely distributed and are associated with later retirements for men and women and for better and less educated workers.

What Do Subjective Assessments of Financial Well-Being Reflect?

Subjective financial assessments are used by social scientists as a measure of financial well-being and by households as the basis for action. Financial well-being, however, increasingly requires workers to build-up savings to meet hard-to-see future needs, specifically retirement, their children’s education, and paying off student loans. This paper analyzes data from the FINRA Investor Education Foundation’s 2012 Financial Capability Survey to test whether subjective financial assessments 1) primarily reflect day-to-day, rather than distant, financial concerns; 2) increasingly reflect distant concerns if the household’s day-to-day finances are in reasonably good shape; and 3) increasingly reflect distant concerns if the worker is financially literate. The paper found that: * Subjective financial assessments primarily reflect day-to-day conditions. * This remains the case even if the household’s day-to-day finances are in reasonably good shape. * Financial literacy enhances sensitivity to the lack of a retirement plan and having a mortgage greater than the value of one’s house, but it has no noticeable effect on sensitivity to life and medical insurance deficits, having an inactive retirement plan, not saving for college, or student debt burdens. The policy implications of the findings are: * Subjective financial assessments have become a poor measure of financial well-being. * Workers by themselves cannot be expected to devote much effort to addressing distant deficits. * Initiatives to improve well-being must raise awareness – or compensate for the lack of awareness – of hard-to-see distant future deficits.

How the Risk of Displacement for Older Workers Has Changed

Using Blinder–Oaxaca decomposition and relying on the consistent design of the Displaced Worker Survey since 1996, this study analyses various factors contributing to the rising dislocation of older workers, such as changes in tenure, industry mix, educational attainment, and labor force participation. Although in the past older workers were less prone to displacement compared with prime‐age workers, this paper finds that older workers are now more likely to be displaced, conditional on education, manufacturing industry, and tenure. Declining tenure, a higher incidence of displacement in manufacturing, and a higher labor force participation among older workers largely explain the convergence of displacement rates among older and prime‐age workers.