by Paola Scommegna, senior writer/editor
The loss of jobs, homes, and investment wealth that characterized the U.S. “Great Recession” (2007 to 2009) also took a personal toll. A number of researchers at the Population Association of America’s (PAA) 2012 annual meeting presented studies documenting the recession’s social impact.
Retirement Postponed: Following the Great Recession, 40 percent of older Americans decided to postpone retirement, reported Brooke Helppie McFall of the University of Michigan. The greater the loss, the more likely people were to delay their retirement, she found.
Her study is the first to link actual data on household wealth just before and after the downturn to the retirement plans of a nationally representative sample of Americans age 50 and older, using the Health and Retirement Study along with the Cognitive Economics Study.
The typical older household lost about 5 percent of its total wealth between the summers of 2008 and 2009, she found. The average older person would need to work between 3.7 and 5 years longer than they planned in order to make up the money they lost, according to her analysis.
But very few people told interviewers that they intended to work long enough to recoup their entire loss, instead trading financial security for leisure, McFall reported. The typical person surveyed who planned to work longer because of the recession only planned to work about 1.6 years longer than they had originally planned. Not included in the survey were people who were already laid off or those who had already retired.
More Depression Among Older Americans: Lauren Hersch Nicholas of the University of Michigan and Melissa McInerny and Jennifer Mellor of the College of William and Mary used the Health and Retirement Survey to explore the health consequences of the Great Recession on older Americans. Although many studies link higher incomes to better health, no other studies have examined the impact of sudden financial loss on health, they noted.
“Respondents with stock market wealth interviewed right after the crash reported significantly worse self-rated health than respondents interviewed pre-crash,” they write. They also found that post-crash, stock owners had more symptoms of depression and were 4 percentage points less likely to report feeling happy in the previous two weeks.
Loss of wealth is different from job loss, Hersch noted. An event such as becoming unemployed can have both positive and negative impacts on health. While the financial stress may bring physical symptoms, the additional free time may contribute to improved health. Job loss allowed more adults to be available to provide care for aging parents, she said.
Fewer Newborns: Every 1 percent increase in job loss among North Carolina’s working-age population (ages 25 to 64) was associated with a roughly 3 percent decline in black teen fertility, according to preliminary findings. Christina Gibson-Davis, Elizabeth Ananat, and Anna Gassman-Pines at Duke University examined North Carolina public records on all live births and all job losses for each community during each month between 1990 and 2009. They also found a link between the Great Recession and reduced fertility among married women with at least some college education, but no link between local job loss and fertility among this group. They suggest that more-educated women may have more acutely experienced the recession’s “ripple effects” including declining housing prices and decreases in the stock market.
Impact on Divorce Mixed: Did the economic stress of the Great Recession contribute to more divorce or did troubled couples stay together because divorcing became too costly? Any answer to this question is tempered by the fact that divorce has been on the decline in recent years. Preliminary results from Julie Brine and Brian Serafini of the University of Washington suggest that divorce filings in five states declined in the wake of local job loss and home foreclosure. But Phillip Cohen of University of North Carolina at Chapel Hill found some evidence of higher divorce in states with higher home foreclosure rates, but only among college-educated couples. He suggested that more-educated people are more likely to be the ones to own homes and to be impacted by foreclosure. This study, based on American Community Survey data, found no evidence that unemployment had much impact on divorce.