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Access Type

WSU Access

Date of Award

January 2019

Degree Type


Degree Name




First Advisor

Gail J. Summers


Project Purpose: We examine an important aspect of retirement, namely, financial readiness-to-retire among workers ages 51-64. Although the economic crisis of 2008, known as the Great Recession, is now over, its impacts are expected to last well into the future. This dissertation analyzes the status of various employer-sponsored fringe benefits and household financial state of US adults, ages 51-64. Our research also aims to understand how the Great Recession may have left this cohort financially vulnerable as they near retirement. Questions addressed are: (1) Did the great recession affect older worker compensation, including receipt of employer-sponsored health insurance and other fringe benefits, and if so, how? (2) Did it influence how much workers were working, and if so, how? (3) How did it affect plans for retirement among adults ages 51-64, and important aspects of readiness-to-retire, such as net worth of households and risk of households facing poverty?

Data: Longitudinal and nationally representative data covering 2000-2012 from the Health and Retirement Study (HRS) has been analyzed. For active workers, ages 51-64, we examine a worker’s effective hourly wage, having job-based health insurance in own name, having a pension plan at current job, having long-term-care insurance, having promised retiree health benefits, and working part- vs. full-time. We also examine several household-level financial variables for adults, ages 51-64, in order to understand whether and how overall household finances have changed in recent years among adults in late mid-life. My preliminary calculations indicate there are 32,884 HRS respondents available for the active worker analyses, and 53,272 respondents available for the broader analyses.

Methods: The effects of the recession were first examined descriptively by tabulating trends in each outcome of interest over the period, and then examined econometrically by estimating a series of multivariate models, one for each outcome, that quantify the effects of time while simultaneously controlling for other determinants of that outcome. Variables measured in dollars are inflation-adjusted. Logit regressions are performed for four different job-based fringe benefits. All models are estimated using HRS sampling weights, so they generalize to either all active workers, ages 51-64 or all adults, ages 51-64, depending on the outcome. Coefficients on the year dummies reveal the effects of macroeconomic events that occurred over the period (relative to the baseline of 2000) on each outcome variable, ceteris paribus.

Results: Four major findings emerge from our descriptive analyses. First, among male workers in this age range, average hourly wages (measured in 2012 dollars) declined significantly between 2000 and 2012. Women’s wages rose significantly, yet when combined into one group, average wages of workers in this age range did not change at all between 2000 and 2012. Second, workers in this age range experienced significant declines in their access to several important fringe benefits, particularly having employer-sponsored health insurance in one’s own name and a promise of retiree health benefits upon retirement. We have documented that older workers experienced sharp declines in these benefits following the 2008 financial crisis and its aftermath. Third, among workers in this age range part of the decline in fringe benefits observed between 2000 and 2012 occurred because older workers who became unemployed took jobs upon reemployment which were less likely to carry certain benefits, such as health insurance and retiree health benefits. Finally, there appears to be growing inequality in the total resources held by adults ages 51-64.

Three key findings emerge from our regression analyses, separate from those discussed above regarding our descriptive analyses. One is that the reductions in fringe benefits which occurred between 2000 and 2012 were not just the result of the Great Recession. Rather, the Great Recession aggravated an already downward trend in access to fringe benefits, particularly employer-sponsored insurance benefits. A second key finding from our econometric models is that for both health insurance and retiree health insurance, after the Great Recession the likelihood of having health insurance fringe benefits continued to decline. The marginal effects of the post-recession years were not reduced, even after controlling for an extensive vector of independent variables. Finally, a critical finding from this research is that labor markets are indeed sensitive to broad changes in the economy and to economic shocks such as recessions. They respond, not just through changes in the number of workers employed, but through changes in what workers are paid, including workers’ fringe benefits. Access to health insurance through one’s own employment and promises of retiree health benefits were found to be especially sensitive.

Conclusion: Many older workers have experienced an erosion in wages and employer-sponsored benefits which threatens their retirement security. The Great Recession aggravated an already downward trend in access to fringe benefits, particularly employer-sponsored insurance benefits. An increasing number of older adult households are at risk of going into poverty.

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