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Capability, Health, And The Labour Market – The Retirement Decision

Author

Listed:
  • Bolin, Kristian

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • Lood, Qarin

    (Institute of Neuroscience and Physiology, Department of Health and Rehabilitation, Sahlgrenska Academy, Centre for Ageing and Health – AgeCap, University of Gothenburg, Gothenburg, Sweden)

Abstract

The time of retirement is analyzed in a theoretical framework taking capability and health into account. Capability if formalized as a stock characteristic which determines the attained amounts of a composite good which yields utility. The model is purposely simple and comprises one choice variable – the time of retirement. The core assumption is that inherited capability influences the rate of evolvement of health, and vice versa, and that the rates of change of the stocks differ between the pre- and post-retirement periods. The optimal retirement timing decision is characterized and the effects of the model’s exogenous variables on this decision are examined. We derive refutable comparative statistics results with respect to the model’s exogenous variables, and, for example, show – for a specified version of the model – how the timing of retirement depends on the inherited amounts of capability and health.

Suggested Citation

  • Bolin, Kristian & Lood, Qarin, 2021. "Capability, Health, And The Labour Market – The Retirement Decision," Working Papers in Economics 810, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0810
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    File URL: https://gupea.ub.gu.se/handle/2077/69498
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    References listed on IDEAS

    as
    1. Bolin, Kristian & Jacobson, Lena & Lindgren, Bjorn, 2001. "The family as the health producer -- when spouses are Nash-bargainers," Journal of Health Economics, Elsevier, vol. 20(3), pages 349-362, May.
    2. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    3. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    4. Martha Nussbaum, 2003. "Capabilities As Fundamental Entitlements: Sen And Social Justice," Feminist Economics, Taylor & Francis Journals, vol. 9(2-3), pages 33-59.
    5. Agee, Mark D. & Crocker, Thomas D., 2013. "Operationalizing the capability approach to assessing well-being," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 80-86.
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    More about this item

    Keywords

    Capability; Health; Retirement;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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