Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



The COVID-19 pandemic disrupted the US labor market, leading to an unprecedented loss of 22 million jobs in March and April 2020. Evidence from past recessions indicates that economic downturns are typically associated with an increase in retirements. In this study, we revisit the relationship between recessions and retirement in the COVID-19 era, using data from the Current Population Survey (CPS) supplemented by other data on economic and COVID conditions. We find that higher unemployment is associated with an increase in the probability of transitioning from employment to being out of the labor force during the pre-pandemic period, consistent with previous studies. Surprisingly, however, retirement transitions during the pandemic have been insensitive to local labor market conditions. Our finding that the probability of retirement increased during the pandemic but that retirements are largely unrelated to local economic or COVID conditions points to a potential role for common national factors such as generalized health concerns, government policies, or stock market gains.


retirement, unemployment, recession, pandemic

JEL Code

D1, D9, J6, E6

Working Paper Number

PRC WP2022-20


Zhang acknowledges funding from the Jerome A. Schiff Fellowship.

Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2022 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


The authors acknowledge helpful comments from the Wellesley College Economics Research Seminar.

Included in

Economics Commons



Date Posted: 24 August 2022