The aging process and the reduction of labor-force participation are matters of much concern in most developed countries, especially for their implication on the sustainability of Social Security systems and for tackling poverty, just to mention few topics. For this reasons the literature on retirement has developed dramatically in the last decades and, thanks to improved computer power and to data availability, the estimation techniques are getting realistic and the fields of application are constantly increasing. In this paper I present an overview of the most recent developments in micromodeling retirement decisions and discuss the main advantages and disadvantages of each approach; in particular, I put an emphasis on the trade-off between the degree of realism of hypotheses,on the one hand, and data tractability and/or estimation performance, on the other hand, affecting the choice of the estimation strategy. I also sketch some of the most relevant topics which deserve more attention in future research. As an example, in the remainder of the article I focus on the Italian case: after presenting some stylized facts and the main results of the applied works assessing the effects of Social Security on agents’ choices, I carry out a comparison between two alternative “dynamic” estimation approaches (Duration model and Option Value model) and discuss their main implications.In particular, as for the Duration model, I propose several new measures of the wealth accumulation opportunities provided by the Social Security system and assess their role played in determining the timing of retirement of Italian older male employees.
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Paper provided by Center for Research on Pensions and Welfare Policies, Turin (Italy) in its series CeRP Working Papers with number
28.
Find related papers by JEL classification: H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Robin L. Lumsdaine & James H. Stock & David A. Wise, 1996.
"Why Are Retirement Rates So High at Age 65?,"
NBER Chapters,
in: Advances in the Economics of Aging, pages 61-82
National Bureau of Economic Research, Inc.
[Downloadable!]
Agar Brugiavini & Franco Peracchi, 2004.
"Micro-Modeling of Retirement Behavior in Italy,"
NBER Chapters,
in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 345-398
National Bureau of Economic Research, Inc.
[Downloadable!]
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