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The Challenge of 401(k) Plans - Boston College

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Matthew S. RutledgeResearch EconomistCenter for Retirement Research at Boston College19thAnnual Meeting of the Retirement Research ConsortiumWashington, DCAugust 4, 2017
Comments on“Work-Life Balance and Labor Force Attachment at Older Ages”ByAngrisani, Casanova, and Meijer
There’s more to life than money (or health).
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Most research on decision to work vs. retire focuses on finances and health.But more subjective, harder-to-measure factors matter too.Munnell, Rutledge, and Sanzenbacher (2015):37 percent of HRS respondents retire earlier than planned.Job loss and health shocks matter the most.But all observable shocks account for less than one-quarter of earlier-than-planned retirements.What’s left? Job and life satisfaction, quality of leisure, etc.
Angrisani, Casanova, Meijer (2017)
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Focus onwork-life balance, using unique HRS measures.How work interferes with lifeHow life interferes with workExamine how work-life balance affects work transitions.FT to PT, FT to retirement, PT to retirementExaminehoweffect of a spousal health shock on these transitions differs by work-life balance.Can work-life balance mediate the spousal health shock’s effect on work?
How could these work-life balance factors affect work decisions at older ages?
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Work-to-life interference (WLI)Does your job getin the way ofyour personal life?If so, probably less likely to want to keep working.If spouse gets sick, may want to re-prioritize.Life-to-work interference (LWI)Does your personal life get in the way of your job?If so, it may be hard to keep working.If spouse gets sick, becomes even harder to hold job.
Finding 1: when work affects life, workers are more likely to retire.
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Women: when work-to-life interference is high, more transitions from full- or part-time to retirement.Men:when work-to-life interference is high,more part-timers move to retirement.But full-timers do not seem to move to part-time or retire.Little evidence of an association between life-to-work interference and work transitions.
Finding 2: when work affects life, women adjust more after a spousal health shock.
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Women: when work-to-life interference is high, a spousal health shock:Increases FT to PT transitions.Increases PT to retirement transitions.Men: no detectable difference in transitions by WLI.
Results suggest women still bear more responsibility when life interferes.
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More sensitive to work-life balance in transition probabilities.Closer relationship between work-life balance and transitions after spousal health shocks.Do women in this sample see more spousal health shocks?Consistent with Goldin (2014) that female-male wage gap is smaller in work environments that are more naturally flexible.
Why doesn’t life’s effect on work matter more?
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Offsetting effects of LWI on employment transitions?When life interferes, it’s hard to work.But if they’re working, they have overcome LWI.Offsetting effects of LWI on relationship between transitions and spousal health shocks?A spousal health shock: life gettingeven morein the way.But high-LWI workers may be better able to cope.How correlated are WLI and LWI?Is there a vicious cycle?
What can policy do?
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Can governmenthelpwork interfere less with life?Rules on work-hour predictability, overtime pay.Reform may have to come from employers, not government.Policycanprobably affect workerbargainingpower.Can governmenthelpwork’s interference with life matter less after a spousal shock?Study mentions paid family leave, but is that WLI or LWI?
Critiques and suggestions
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Why do the results differ withRaymoand Sweeney (2006)?They find no gender differences in how work-life balance affects retirement intentions.Is that because intentions differ from actual results?Can we see HRS respondents’ answers to WLI and LWI multiple times?If so, what happens when work-life balance gets worse?WLB vs. WLI (and LWI): similar acronyms, opposite effects.

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The Challenge of 401(k) Plans - Boston College