Lifetime Labor Supply and Human Capital Investments
AbstractWe develop a model of retirement and human capital investment to study the effects of tax and retirement policies. Workers choose the supply of raw labor (career length) and also the human capital embodied in their labor. Our model explains a significant fraction of the US-Europe difference in schooling and retirement. The model predicts that reforms of the European retirement policies modeled after the US can deliver 15-35 percent gains in per-worker output in the long run. Increased human capital investment in and out of school accounts for most of the gains, with relatively small changes in career length. JEL classification: E24; J24
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Bibliographic InfoPaper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2012-011.
Date of creation: Jan 2012
Date of revision:
Lifetime labor supply; human capital;
Other versions of this item:
- Rodolfo E. Manuelli & Ananth Seshadri & Yongseok Shin, 2012. "Lifetime labor supply and human capital investment," Working Papers 2012-004, Federal Reserve Bank of St. Louis.
- Yongseok Shin & Ananth Seshadri & Rody Manuelli, 2012. "Lifetime Labor Supply and Human Capital Investment," 2012 Meeting Papers 946, Society for Economic Dynamics.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-05-22 (Economics of Ageing)
- NEP-ALL-2012-05-22 (All new papers)
- NEP-DGE-2012-05-22 (Dynamic General Equilibrium)
- NEP-HRM-2012-05-22 (Human Capital & Human Resource Management)
- NEP-LAB-2012-05-22 (Labour Economics)
- NEP-LMA-2012-05-22 (Labor Markets - Supply, Demand, & Wages)
- NEP-LTV-2012-05-22 (Unemployment, Inequality & Poverty)
- NEP-MAC-2012-05-22 (Macroeconomics)
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