Retirement and Fixed Costs to Work: An Empirical Analysis
AbstractIn this paper we study consumption around the age of retirement. We consider a model where consumption and leisure are non-separable and retirement is endogenous. We consider the case where non-separabilities come from the existence of fixed costs to work. We show that the existence of unobserved heterogeneity related to these non-separabilities will lead to biases of the OLS estimators of structural parameters of demand systems conditioned on retirement. These estimates give bounds to the true fixed costs. We estimate the model with French data and compute the bounds of these structural parameters.
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Bibliographic InfoPaper provided by University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics in its series CAM Working Papers with number 2006-09.
Length: 22 pages
Date of creation: Aug 2006
Date of revision:
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retirement; fixed costs to work; correlated random coefficient model; bias;
Find related papers by JEL classification:
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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