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Economist’s View – “Effects of the Financial Crisis and Great Recession on American Households”

From the Economist’s View:

“Effects of the Financial Crisis and Great Recession on American Households”

The conclusion to this paper by Michael Hurd and Susann Rohwedder is not very encouraging:

Effects of the Financial Crisis and Great Recession on American Households, by Michael D. Hurd and Susann Rohwedder, NBER [open link]: Introduction …In this paper we present results about the effects of the economic crisis and recession on American households.

[…]

According to our measures almost 40% of households have been affected either by unemployment, negative home equity, arrears on their mortgage payments, or foreclosure. Additionally economic preparation for retirement, which is hard to measure, has undoubtedly been affected. Many people approaching retirement suffered substantial losses in their retirement accounts: indeed in the November 2008 survey, 25% of respondents aged 50-59 reported they had lost more than 35% of their retirement savings, and some of them locked in their losses prior to the partial recovery in the stock market by selling out. Some persons retired unexpectedly early because of unemployment, leading to a reduction of economic resources in retirement which will be felt throughout their retirement years. Some younger workers who have suffered unemployment will not reach their expected level of lifetime earnings and will have reduced resources in retirement as well as during their working years.

[…]

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