Insights Blog
COVID-19 Recession Worsens Inequalities in Job Safety Among Older Workers
SCEPA's latest research finds that the COVID-19 recession worsens the inequality of job safety among older workers.
SCEPA’s latest research by Senior Fellow William M. Rodgers III, former chief economist at the US Department of Labor, highlights a potential headwind to recovery from COVID-19. His findings show that states which lean or are solidly Republican re-opened sooner than Democratic states, and their testing and infection data are “trending poorly.”
Last updated June 1, 2020.
A compendium of economic thoughts and policy recommendations in response to the coronavirus.
Willi Semmler, who leads SCEPA's Economics of Climate Change project, and a diverse team of researchers received a competitive grant from the Australian Research Council (ARC).
Despite Trump's efforts to rollback federal retirement reform, 22 states introduced reform since his inauguration.
Retirement systems in rich nations have shifted away from pay-as-you-go social insurance programs (such as Social Security) and towards financially-based, advance–funded retirement accounts (such as 401(k)-type accounts).
For many, 401(k) accounts are used both to save for retirement and self-insure against income shocks prior to retirement. Income shocks are the result of job loss, illness, divorce, or other life transitions. Unfortunately, they are common - 96% of Americans experience four or more income shocks by the time they reach age 70.
With support from the National Endowment for Financial Education (NEFE), ReLab investigated how the reality of income shocks leads people, especially those with lower incomes, to make pre-retirement withdrawals from their 401(k) plans. NEFE issued a report summarizing the research findings (listed below), titled, Income Shocks and Life Events: Why Retirement Savings Fall Short. Their report offers a checklist to help workers protect their retirement savings before, during, and after income shocks happen.
Untangling the Determinants of Retirement Savings Balances:
- 401(k) Plans: A Failed Experiment: Inadequate wealth accumulations reflect well-known design flaws in the 401(k) system.
- Household Economic Shocks Increase Retirement Wealth Inequality: Economic shocks, such as job-loss, have particularly adverse effects on retirement savings of workers in low-income households, exacerbating retirement savings inequality.
- Policy Options for Cutting Retirement Plan Leakages: Financial necessity is an important reason low-wage households are more likely to make pre-retirement withdrawals from their 401(k) plans. To ensure that all households both contribute to retirement plans and remain invested, retirement policy should both mandate contributions and prohibit pre-retirement withdrawals.
On Tuesday, November 7th, ReLab Director and economist Teresa Ghilarducci joined the "Adam Ruins Everything" show to discuss the failure of our retirement system.
SCEPA’s Retirement Equity Lab (ReLab) was honored to be chosen to participate in AARP’s Social Security Innovation Challenge.
About SCEPA
SCEPA works to focus the public economics debate on the role government can and should play in the real productive economy - that of business, management, and labor - to raise living standards, create economic security, and attain full employment.
