The 2008/9 financial crisis was characterised by falls in housing and stock prices that were unprecedented in recent history and which, in turn, will have led to substantial shocks to household wealth and socioeconomic position. In this paper we document the effects of the crisis on the finances of those aged 50 and over in England. In addition we estimate the impact of these financial ‘shocks’ on a number of economic and non-economic outcomes. For this latter analysis we exploit the fact that our source of data – the English Longitudinal Study of Ageing – covers the period May 2008 to July 2009 when asset prices were changing rapidly. Individuals interviewed in different months will therefore have been affected differently at the point at which their data were collected. Since month of interview is uncorrelated with other individual or household characteristics we can use this variation,
coupled with measures of exposure to the price changes based on asset portfolios observed prior to the crisis in 2006/7, to generate plausibly exogenous variation in wealth shocks with which to identify the effects of interest.
Presented by:
James Banks (Institute for Fiscal Studies, London)
Date & time:
March 15, 2010 4:00 pm - March 15, 2010 5:30 pm
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