The Great Recession, Older Workers with Disabilities, and Implications for Retirement Security

Published: 2012


Evidence suggests that older workers with disabilities have been hit particularly hard by the recent recession. The increased difficulty in finding a job faced by individuals with disabilities, combined with the longer spells of unemployment experienced by all workers in this recession, could mean that laid-off disabled workers in their pre-retirement years may never return to work. In this paper, we use data from the 2004-2010 waves of the Health and Retirement Study to examine how the great recession has affected workers with chronic health conditions that put them at greater risk of disability.  Our results suggest that increases in job losses were 30% greater for those with greater underlying risk of disability than for the general HRS population, and decreases in consumption were 20% greater.  These results have important implications for the well-being of disabled individuals nearing retirement.

Key Findings

    • While the Great Recession is associated with decreases in employment for the overall HRS sample, we find no evidence that these decreases are larger for those individuals who are in poor health and at risk of disability.
    • However, respondents in poor underlying health are significantly more likely to report that they are no longer at their previous job and that their job loss was involuntary.
    • We also find recession-related declines in consumption that are significantly larger for those in poor health.
    • Holding underlying health conditions constant, self-reporting of health-related work limitations was 3.6 percentage points more likely in 2010 than in 2006.