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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. The authors 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 they specify a two-equation dynamic panel data model describing the dynamics of labor force status and self-reported work disability. When they 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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Publisher Info
Paper provided by RAND Corporation Publications Department in its series Working Papers with number 536.

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Length: 48 pages
Date of creation: Nov 2007
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Handle: RePEc:ran:wpaper:536

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Related research
Keywords: disability; employment policies; cross-national comparisons; labor force dynamics;

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Find related papers by JEL classification:
H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David M. Cutler & David A. Wise, 2009. "Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly," NBER Books, National Bureau of Economic Research, Inc, number cutl08-1.
  2. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier. [Downloadable!] (restricted)
  3. Banks, J. & Kapteyn, A. & Smith, J.P. & Soest, A.H.O. van, 2004. "International comparisons of work disability," Discussion Paper 36, Tilburg University, Center for Economic Research. [Downloadable!]
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  4. 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," Working Papers 280, RAND Corporation Publications Department. [Downloadable!]
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  5. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90. [Downloadable!] (restricted)
  6. 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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