On August 3 and 4, the Retirement Research Consortium will hold its annual meeting in which retirement researchers from around the country will converge on Washington to present their latest findings.
The papers being presented next week will explore the impact on retirement from our health, work-life balance, and family ties, as well the millennial generation’s prospects for retirement. These are just some of the research topics. Click here for the full agenda.
For those who can’t attend, the CRR will provide live streaming of the presentations as they occur. In late August, they will be archived on the CRR’s website.
The Retirement Research Consortium includes the Center for Retirement Research (CRR) at Boston College, which sponsors this blog, as well as the Michigan Retirement Research Center, and the National Bureau of Economic Research. The research being presented at the conference is funded by the U.S. Social Security Administration. Throughout the year, the findings will be covered in this blog.Learn More
The first study known to look at changes over several decades in lifetime earnings for the nation’s workers shows a dramatic trend: women are up and men are down.
The oldest people studied, mostly men, began working in the 1950s, when the post-war U.S. economy was going full throttle, and they started retiring in the 1980s when the industrial economy was only in the early stages of a protracted decline. The youngest workers studied are “middle” baby boomers, who came of age during the twin 1980s recessions in heavy industry and experienced the rise of the service economy and two high-tech booms and busts.
Over this time period, men’s earnings went through two distinct phases. In the first phase – which spanned the working lives of men born in 1932 through 1941 – the typical man’s lifetime earnings, adjusted for inflation, saw a 12 percent increase, the researchers found.
In the second phase, men’s lifetime earnings turned negative. Boomers born in 1958 have earned 10 percent less in total than men born in 1942. The decline is primarily due to men being paid less after accounting for inflation, and not from reductions in how many hours or how many years they worked, the analysis found.
In contrast, lifetime earnings for women born over the same 27-year period enjoyed “steady” and “broad-based” gains of 20 percent and 30 percent over the two sub-periods. …Learn More
Now comes the toughest part of borrowing money for college: paying it back.
There is much for this year’s crop of graduates to learn. For example, the federal government gives you a reprieve after graduation, usually six months, before requiring you to start repaying your debts. But did you know that interest builds up during this “grace period”? Starting payments right away reduces how much you’ll have to pay back.
Making repayment mistakes or not having a plan can also be very costly. Click here for some tips to avoid these mistakes.
Here’s another issue: women borrow slightly more money for undergraduate degrees than do men but earn less after college and seem to have more difficulty paying back their loans.
In 2012, women borrowed $21,000 for an undergraduate degree, on average, compared with about $19,500 for men, according to a new study by the American Association of University Women (AAUW).
Men are able to pay their debt back faster too. During the first four years after graduation, men pay off 38 percent of their outstanding college debt. Women pay about 31 percent. Women graduates with student debt are also more likely to report more difficulty making their rent payments, AAWU’s survey found.
Many questions remain unanswered. What explains the differences? Also, the study doesn’t control for how much young adult men and women earn in their jobs. Nor does it sort out the implication of different payoffs for the different types of degrees that men and women choose. Careers in software engineering or nursing are more likely to justify hefty loans than degrees in film or women’s studies with uncertain career paths.
This study raises interesting issues, which future research will hopefully address.
In the meantime, women, it’s something to think about. Learn More
As the post-recession job market continues to improve, so has young adults’ optimism about their future opportunities, a Federal Reserve Board survey shows.
What’s poignant about this youthful optimism is that a changing labor market is making it increasingly difficult for young adults to get their careers off to the right start.
Surely, they sense this. Nearly two-thirds of adults between ages 18 and 30 told the Federal Reserve in a 2015 survey featured in a recent webinar that their schedules in “permanent” jobs were changing daily, weekly, or monthly. They strongly prefer future job stability over higher pay, despite the trendy flexibility of the “gig” economy, Uber driving, and freelancing.
“Permanent employment is not the same as stable employment,” Amy Blair, the Aspen Institute research director for the economic opportunities program, said during the webinar. “Without a stable floor, it’s difficult for a person to invest in himself or herself to build a career.”
The U.S. Bureau of Labor Statistics (BLS) has identified 30 jobs it predicts will have the fastest growth, generating 5 million jobs by 2024. Most of the top 10 are characterized by part-time, low-paying, or seasonal work that can make it difficult to put together a full-time schedule, Blair said. Many are the types of jobs that also lack health benefits, 401(k)s, and paid-time off.
A degree from a premier college can vault a teenager from a low-income family to the height of economic success as an adult.
To date, 15 colleges have signed on to work with Levine, who initially created the calculator for applicants to Wellesley College, where he is an economics professor.
But disadvantaged students face a multitude of barriers to attending the nation’s top colleges, from getting the grades required to withstand stiff competition for acceptance to the absence of a degreed family member who can steer a child, niece or grandson through the process.
Phillip Levine is breaking down one barrier: the well-founded fear among low-income and even middle-class families that an elite liberal arts college is out of the question.
Levine designed a calculator to estimate how much an individual applicant will actually pay, after plugging in his or her family’s unique financial data, such as income, house value, mortgage amount, etc. – and the calculator is way easier than filling out a FAFSA form. Argh.
What’s new about Levine’s cost estimates is that they come from crunching family financial stats into a program that contains an individual college’s unique information about its financial aid and work-study programs, as well as how much current students pay based on their parents’ financial information [these data are supplied anonymously to Levine]. …Learn More
“No one will ever pay you what you’re worth,” Casey Brown says in the Ted video above.
An employee’s value is also highest when unemployment is as low as it is now – 4.4 percent in April – and employers are scrambling to fill jobs.
Why would an employer pay more than it has to? With unions all but extinct, the burden falls on individuals to ensure they’re paid fairly or well. Low unemployment provides workers with more leverage to get what we deserve. Unfortunately, many of us are not good at negotiating how much we earn. Or we avoid it entirely, because we’re uncomfortable with talking money – especially women.
Women “say things like, ‘I don’t like to sing my own praises,’ ” Brown notes.
One time-honored way to test the waters is to get an offer for a job you might like that pays more than your current position. If your current employer values you, they’ll increase your pay to keep you. It can be a risky strategy. In our free-wheeling labor “market,” however, it’s also the best way to learn what you’re worth, because there is only general information about compensation for different types of jobs.
In fact, management researcher David Burkus argues that the U.S. compensation system is built around secrecy. “Keeping salaries secret leads to information asymmetry … [and] an employer can use that secrecy to save a lot of money,” he says in another Ted video. Translation: a lack of information makes it easier to under-pay you.
Unions know this. Historically, unions posted compensation in the different job tiers in each industry so workers would know what they were entitled to.
In place of unions, Elaine Varelas, recruiter for Keystone Partners in Boston, suggested other places to get this critical information: glassdoor.com, job recruiters, LinkedIn contacts, and even human resources executives at friends’ firms who might provide you with salary ranges.
“People owe it to themselves to do their homework and stop hiding under the discomfort,” Varelas says.
So get out there and learn something that will definitely be interesting – and possibly lucrative! Learn More