2010 SSS Presidential Address: The Devolution of Risk and the Changing Life Course in the United States

Recent patterns of labor exit in late life in the United States are increasingly heterogeneous. This heterogeneity stems from diverse employment careers that are emerging in the workplace where job security is declining. Individuals' structural locations in the labor market expose them to diverse risks for employment and income security at older ages. Among those risks are access to institutional mechanisms for retirement saving and the requirement to assume full responsibility for decisions about retirement savings that involve market risks. The spread of these individualized pressures to invest in retirement has elevated the importance of financial literacy in the 21^st century. Late employment careers and patterns of financial literacy are studied in this article using the premier U.S. longitudinal dataset from the National Institute of Aging, the Health and Retirement Study initiated in 1992, which is linked to restricted Social Security earnings records that extend over several decades. These merged data afford the opportunity to observe continuous work histories in this sample from 1981 through 2006 to identify latent trajectories of employment in late life. In addition, a supplementary module attached to the 2004 wave of the HRS provides valuable information on the financial literacy of subgroups. The work-retirement trajectories and financial literacy patterns observed reflect persistent patterns of inequality amplified by modern risks in the labor market.