Private Wealth and Job Exit at Older Age: A Random Effects Model
AbstractPrivate wealth holdings are likely to become an increasingly important determinant in the job exit decision of elderly workers. Net wealth may correlate with worker’s characteristics that also determine the exit out of a job. It is therefore important to include a rich set of observed characteristics in an empirical model for retirement in order to measure the (marginal) effect of wealth on the job exit rate. But even with a rich set of regressors the question remains whether there are unobservable worker’s characteristics that affect both net wealth and the job exit rate. We specify a simultaneous equations model for job exit transitions with multiple destinations, net wealth, and the initial labour market state. The job exit rates and the net wealth equation contain random effects. We allow for correlation between the random effects of job exit and net wealth, and the initial labour market state.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3386.
Length: 40 pages
Date of creation: Mar 2008
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Other versions of this item:
- Hans Bloemen, 2008. "Private Wealth and Job Exit at Older Age: a Random Effects Model," Tinbergen Institute Discussion Papers 08-025/3, Tinbergen Institute.
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-03-25 (Economics of Ageing)
- NEP-ALL-2008-03-25 (All new papers)
- NEP-LAB-2008-03-25 (Labour Economics)
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