TY - JOUR
T1 - Post-retirement labor and non-retirement risky asset allocation
AU - Curnutt, Gary
AU - Sun, Qi
AU - Guillemette, Michael
N1 - Funding Information:
The University of Michigan conducts the HRS, which is supported by the National Institute on Aging (NIA) and the Social Security Administration. The HRS employs a nationally representative sample of about 20,000 panel survey respondents. This article uses the RAND Corporation’s streamlined HRS panel data from 1992–2018. The RAND HRS data are intended to simplify the use of HRS core data. The RAND HRS data keep the variables from most HRS survey modules and merge them into a single respondent-level dataset. The unit of observation for our analyses is defined as respondents engaged in post-retirement labor. We drop from the sample any respondents who did not report their retirement status for all survey waves. Exhibit 1 displays descriptive statistics for the sample.
Publisher Copyright:
© 2021 STAIN Kudus. All rights reserved.
PY - 2021/6
Y1 - 2021/6
N2 - This article studies how post-retirement labor is related to non-retirement risky asset allocation. By using panel data from the 1992-2018 Health and Retirement Study, this article empirically finds a negative relationship over time between non-retirement risky asset allocation and post-retirement labor. Furthermore, this article explores the forced retirement risk (a type of labor income risk) for the post-retirement labor group. Descriptive findings indicate that members of the post-retirement labor group have a greater risk of being forced to retire, and the trend of forced retirement risk is inversely related to equity returns. This latter finding suggests a potential correlation between forced retirement risk and stock returns. If an individual's human capital is at greater risk or becomes more stock-like (i.e., labor income risk correlates with stock returns), then investing in fewer risky assets would be justifiable. When both of these findings are accounted for, they corroborate the findings of this article: Post-retirement labor is negatively associated with risky asset allocation.
AB - This article studies how post-retirement labor is related to non-retirement risky asset allocation. By using panel data from the 1992-2018 Health and Retirement Study, this article empirically finds a negative relationship over time between non-retirement risky asset allocation and post-retirement labor. Furthermore, this article explores the forced retirement risk (a type of labor income risk) for the post-retirement labor group. Descriptive findings indicate that members of the post-retirement labor group have a greater risk of being forced to retire, and the trend of forced retirement risk is inversely related to equity returns. This latter finding suggests a potential correlation between forced retirement risk and stock returns. If an individual's human capital is at greater risk or becomes more stock-like (i.e., labor income risk correlates with stock returns), then investing in fewer risky assets would be justifiable. When both of these findings are accounted for, they corroborate the findings of this article: Post-retirement labor is negatively associated with risky asset allocation.
KW - Legal/regulatory/public policy
KW - Performance measurement
KW - Retirement
KW - Risk management
UR - http://www.scopus.com/inward/record.url?scp=85112504848&partnerID=8YFLogxK
U2 - 10.3905/JOR.2021.1.087
DO - 10.3905/JOR.2021.1.087
M3 - Article
AN - SCOPUS:85112504848
SN - 2326-6899
VL - 9
SP - 112
EP - 123
JO - Journal of Retirement
JF - Journal of Retirement
IS - 1
ER -