Papers by Teresa Ghilarducci
Rates of elder poverty among widows and single women are higher than among couples and men. Pover... more Rates of elder poverty among widows and single women are higher than among couples and men. Poverty among single women reflects low lifetime earnings and spotty pension coverage, whereas poverty among widows results from the exhaustion of financial resources. In both cases, women will benefit from the creation of Guaranteed Retirement Accounts (GRAs), a source of independent retirement income lasting a lifetime.
Inadequate retirement savings will force millions of older Americans to seek work at older ages. ... more Inadequate retirement savings will force millions of older Americans to seek work at older ages. Many who delay retirement will find work, but no study has looked at the effect on wages. This policy brief found being a member of a super-sized birth cohort has depressed Boomers' wages throughout their careers. Labor market crowding caused by Boomers delaying retirement will continue to reduce their wages in old age relative to what would have happened had their share of the labor force declined at the same rate as prior generations. The reduction in wages resulting from the increase in older workers provides a cautionary note to those advocating delayed retirement as a solution to the retirement savings crisis. KEY FINDINGS • Boomers' (born 1948 to 1964) real wages adjusted for inflation grew less than other generations. Boomers' wages grew an average of 3.9% a year when they were young and 0.7% when they were prime-aged, compared to 5.0% and 0.9% for the Silent Generation (born 1925 to 1947) and 6.3% and 1.3% for Generation X (born 1965 to 1982).
Despite spending $100 billion a year in retirement tax breaks, the U.S. faces a retirement income... more Despite spending $100 billion a year in retirement tax breaks, the U.S. faces a retirement income security crisis. Though federal tax breaks for 401(k) plans and IRA plans are known to be ineffective and regressive, until now no one has documented the nearly $20 billion states spend on the same ineffective tax breaks. If federal and state tax deferrals for retirement accounts were transformed to refundable tax credits and deposited into Guaranteed Retirement Accounts, every worker would have an average of over $647 per year in retirement savings from the federal government, with an additional $172 going to those who live in states with income taxes.
RePEc: Research Papers in Economics, Apr 1, 2016
Economic shocks, such as job-loss, have a particularly adverse effect on the retirement savings o... more Economic shocks, such as job-loss, have a particularly adverse effect on the retirement savings of workers in low-income households, exacerbating retirement savings inequality. Low income households are more likely than moderate- and upper-income households to experience economic shocks. Workers in low-income households are also more likely to withdraw from their retirement account after a shock. This study shows that these shocks have significant effects on the finances of low-income households, causing up to a third of all withdrawals, and possibly more.
RePEc: Research Papers in Economics, 2019
Social Security benefits are progressive and offset the unequal distribution of retirement wealth... more Social Security benefits are progressive and offset the unequal distribution of retirement wealth generated by a broken employer-based retirement system. Though Social Security benefits keep retirees out of poverty, American workers still face a retirement income crisis. Policymakers need to strengthen and expand Social Security and mandate employer-sponsored retirement plans to ensure universal coverage and adequate retirement income.
RePEc: Research Papers in Economics, Mar 1, 2019
<jats:title>Abstract</jats:title> <jats:p>Using Health and Retirement Study dat... more <jats:title>Abstract</jats:title> <jats:p>Using Health and Retirement Study data linked to summary plan descriptions and W-2s, this study reports trends in retirement wealth inequality of older employees 1992–2010. The study identifies and corrects methodological flaws in past research. Retirement wealth is highly unequally distributed; the top lifetime earnings quintile holds half of all retirement wealth, the bottom quintile, only 1%. The top earnings quintile fared better in 2010 than in 1992, whereas bottom-quintile earners fared worse. But retirement wealth inequality mainly reflects inequality within earnings quintiles, resulting from inadequate savings, not outsize accumulations. Systemic flaws reduce median retirement wealth by 84%</jats:p>
RePEc: Research Papers in Economics, Jun 1, 2015
3 We estimate that states spent over $20 billion in 2014 on tax subsidies for retirement accounts... more 3 We estimate that states spent over $20 billion in 2014 on tax subsidies for retirement accounts. If we add this figure to the federal retirement tax expenditure estimate of 94.6 billion for the same year, we arrive at total retirement tax expenditure of $114 billion in 2014-with federal tax subsidies for retirement accounts making up more than 80% of the total.
SCEPA publication series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization., Dec 1, 2018
SCEPA policy note series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization., Aug 1, 2018
The first birth cohort exposed to the 401(k) system for most of their working lives is now approa... more The first birth cohort exposed to the 401(k) system for most of their working lives is now approaching retirement. 401(k) participants in this cohort have accumulated only about a third of the savings they need to maintain their standard of living in retirement. The 401(k) system fails even those who use it as instructed. High earners are as ill-prepared for retirement as low-and moderate earners. Inadequate wealth accumulations reflect well-known design flaws in the 401(k) system – patchy coverage, high fees, opportunities to take pre-retirement withdrawals, and the lack of a default pathway for converting accumulated wealth into retirement income.
In 1950, the United States could claim racial equity in one important respect – both black and wh... more In 1950, the United States could claim racial equity in one important respect – both black and white American men who reached age 65 could expect to live twelve more years to age 77. Unfortunately, by 2010, racial gaps appeared. White men at age 65 were projected to live almost 2 years longer than black men, while white women could expect to live one year longer than black women. In 60 years, racial equity turned into a racial gap in age-65 life expectancy. Th is is signifi cant when considering public policy proposals that seek to cut Social Security benefi ts by raising the retirement age, the age at which workers can collect their full Social Security benefi ts. A racial gap in life expectancy past the age of 65 means this cut in benefi ts will disproportionately impact Blacks.
In the two years after the Great Recession of 2007Ð2009, 64 percent of workers at the top of the ... more In the two years after the Great Recession of 2007Ð2009, 64 percent of workers at the top of the earnings distribution, compared to 56 percent of those at the bottom, experienced increases in defined contribution (DC) retirement wealth. We condition DC wealth accumulation on workersO position in the earnings distribution using a unique 2-year panel (2009-2011) from the Survey of Income and Program Participation (SIPP). Earnings losses of 10 percent or more in a personOs career; non-employment spells; lower employer contributions; and having less diversified portfolios barely affect earners in the top 10 percent of the earnings distribution, but are associated with less DC wealth accumulation for those at the bottom. These differences may contribute to a growing retirement wealth gap.
RePEc: Research Papers in Economics, Apr 1, 2015
While increasing the normal retirement age will make it more difficult for all Americans to exper... more While increasing the normal retirement age will make it more difficult for all Americans to experience a healthy and active retirement, Blacks will be disproportionately affected. Under the normal retirement age of 67, neither Whites nor Blacks are able to experience even a single year of retirement free from activity limitations, chronic conditions that limit a person's ability to perform activities expected of someone their age. Examples
Older women face worse age discrimination than men in the labor market. This results in lower pay... more Older women face worse age discrimination than men in the labor market. This results in lower pay for older women than for older men, and a more difficult time finding work when unemployed. This short paper outlines why this might be the case and offers an outlook for the future.
Advocates for raising the retirement age to 70 and beyond argue that since the "average"... more Advocates for raising the retirement age to 70 and beyond argue that since the "average" American is living longer, lifetime benefits are actually increasing. However, black seniors die sooner and are sick for a longer period of time than white seniors. This means that any policy to cut Social Security benefits by raising the normal retirement age will have a disparate and negative impact on Blacks. This study examines the size and growth of racial gaps in mortality and morbidity, and shows that while some groups have experienced lifetime benefit increases, others have not.
RePEc: Research Papers in Economics, Jul 1, 2014
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Papers by Teresa Ghilarducci