A recursive model of economic well-being in retirement

Although investigators have identified some of the social and economic forces that influence levels of economic resources among elderly adults, little has been done to organize these factors into predictive lifespan models of economic well-being. Applying path analysis to data on retiring workers from the Panel Study of Income Dynamics, the present research offers a beginning recursive model. It traces the influences of demographic/family background, human capital, and work-related characteristics on economic position in retirement. Controlling for differences in labor force participation and other human capital measures, race and family background lose their direct significance, whereas sex remains directly significant in predicting economic resource levels for recently retired workers. In addition, the model estimates the direct and indirect effects played by industrial sector location and social class position. In total the structurally based capital attainment model explains 65% of the variance in a measure of economic well-being that includes retirement income and wealth.