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Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences

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Author Info
Arie Kapteyn
James P. Smith
Arthur van Soest
James Banks

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Abstract

Many western industrialized countries face strong budgetary pressures due to the aging of the baby boom generations and the general trends toward earlier ages of retirement. We use the American PSID and the European Community Household Panel (ECHP) to explain differences in prevalence and dynamics of self-reported work disability and labor force status. To that end we specify a two-equation dynamic panel data model describing the dynamics of labor force status and self-reported work disability. When we apply the U.S. parameters to the equations for the thirteen European countries we consider, the result is generally that work disability is lower and employment is higher. Furthermore, measures of employment protection across the different countries suggest that increased employment protection reduces reentry into the labor force and hence is a major factor explaining employment differences in the pre-retirement years.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13536.

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Date of creation: Oct 2007
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Handle: RePEc:nbr:nberwo:13536

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Find related papers by JEL classification:
C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data
I12 - Health, Education, and Welfare - - Health - - - Health Production
J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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  1. Banks, James & Kapteyn, Arie & Smith, James P. & van Soest, Arthur, 2004. "International Comparisons of Work Disability," IZA Discussion Papers 1118, Institute for the Study of Labor (IZA). [Downloadable!]
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  2. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90. [Downloadable!] (restricted)
  3. James Banks & Arie Kapteyn & James P. Smith & Arthur van Soest, 2005. "Work Disability is a Pain in the *****, Especially in England, The Netherlands, and the United States," Labor and Demography 0505017, EconWPA. [Downloadable!]
    Other versions:
  4. David H. Autor & Mark G. Duggan, 2003. "The Rise In The Disability Rolls And The Decline In Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 157-205, February. [Downloadable!] (restricted)
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