Essays on the labour supply of older workers
AbstractThe objective of this thesis is to contribute to a strand of the empirical labor supply literature by advancing our understanding of the labor supply of relatively older workers. This is a topic of particular interest in developed countries, where due to current population trends older individuals comprise an ever growing share of the population. Chapter 1 provides a summary and overview of the thesis. Chapter 2 shows that husbands and wives have an incentive to coordinate their retirements due to the existence of leisure complementarities, which arise when one or both spouses enjoy retirement more if it is shared with their partner. Chapter 3 advances our understanding of older individuals' incentives to continued work by showing that, after accounting for selection into retirement and composition effects, there is no statistical evidence that wages of individuals who remain in their career job ever decrease with age. In other words, conditional on remaining on the career job, the individual wage profile does not have an inverted-U shape. Any wage decreases associated to the declining physical and cognitive abilities associated to the aging process would materialize only at the point where the individual transits from the career job into part-time work, usually referred to as semi-retirement. For individuals that transit directly from the career job into full retirement, no decrease in wages would be observed. Chapter 4 builds on the results obtained in chapters 2 and 3 to estimate the role of leisure complementarities in determining joint retirements. If finds that they account for 8% of the joint retirements observed in the data (those where husband and wife retire within a year of each other). This result underlines the importance of jointly modeling the behavior of husbands and wives. Confining the analysis to the study of men while taking the behavior of their wives as exogenous -the approach traditionally followed in the literature-, ignores a source of simultaneity in spouses' decisions. This may lead to inaccurate predictions of the effect of policy changes on men's retirement behavior.
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Bibliographic InfoPaper provided by University College London in its series Open Access publications from University College London with number http://discovery.ucl.ac.uk/624492/.
Date of creation: 28 Nov 2010
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Publication status: Published
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