TY - JOUR
T1 - The effect of inheritance receipt on retirement
AU - Brown, Jeffrey R.
AU - Coile, Courtney C.
AU - Weisbenner, Scott J.
PY - 2010/5
Y1 - 2010/5
N2 - This paper provides new evidence on how wealth shocks influence retirement behavior. Economic theory generally posits that leisure is a normal good, yet it is difficult to obtain reliable empirical estimates of the wealth effect because wealth is correlated with numerous unobservable characteristics that affect labor supply. We use inheritance receipt as a wealth shock and find that it is associated with a significant increase in the probability of retirement, especially when the inheritance is unexpected. This evidence has important implications for how public policies, such as pension or tax reform, may influence retirement behavior through the wealth effect.
AB - This paper provides new evidence on how wealth shocks influence retirement behavior. Economic theory generally posits that leisure is a normal good, yet it is difficult to obtain reliable empirical estimates of the wealth effect because wealth is correlated with numerous unobservable characteristics that affect labor supply. We use inheritance receipt as a wealth shock and find that it is associated with a significant increase in the probability of retirement, especially when the inheritance is unexpected. This evidence has important implications for how public policies, such as pension or tax reform, may influence retirement behavior through the wealth effect.
UR - http://www.scopus.com/inward/record.url?scp=77955132838&partnerID=8YFLogxK
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U2 - 10.1162/rest.2010.11182
DO - 10.1162/rest.2010.11182
M3 - Article
AN - SCOPUS:77955132838
SN - 0034-6535
VL - 92
SP - 425
EP - 434
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 2
ER -