Retirement, financial incentives and health
This paper aims to assess empirically the relative size of incentive effects and health for the retirement decision. We specify and estimate a dynamic model for retirement behaviour that explicitly takes account of eligibility conditions and replacement rates of alternative exit routes from the labour force, and health. A range of health instruments are constructed from estimates of a model for health dynamics and these are used to assess the effect of reporting errors and of endogeneity of health on the estimates of the retirement model. Our results provide evidence that health and retirement are endogenously related. Health matters but the size of the health effect depends crucially on the health measure used. We find that subjective health measures overstate the effect of health on retirement and that endogeneity of health suppresses the health effect. Incentive effects are relatively insensitive to alternative specifications for health. The incentive effects are strong for Early Retirement schemes. There is evidence that income streams in alternative exit routes are compared in the retirement decision and that alternative exit routes act as substitutes.
(This abstract was borrowed from another version of this item.)
References listed on IDEAS
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.:
- Arie Kapteyn & Klaas de Vos, 1997.
"Social Security and Retirement in The Netherlands,"
NBER Working Papers
6135, National Bureau of Economic Research, Inc.
- Bound, John & Schoenbaum, Michael & Stinebrickner, Todd R. & Waidmann, Timothy, 1999.
"The dynamic effects of health on the labor force transitions of older workers,"
Elsevier, vol. 6(2), pages 179-202, June.
- John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc.
- Marcel Kerkhofs & Maarten Lindeboom, 1997. "Age related health dynamics and changes in labour market status," Health Economics, John Wiley & Sons, Ltd., vol. 6(4), pages 407-423.
- Richard V. Burkhauser, 1979. "The Pension Acceptance Decision of Older Workers," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 63-75.
- John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
- Gloria J. Bazzoli, 1985. "The Early Retirement Decision: New Empirical Evidence on the Influence of Health," Journal of Human Resources, University of Wisconsin Press, vol. 20(2), pages 214-234.
- Daula, Thomas & Moffitt, Robert, 1995. "Estimating Dynamic Models of Quit Behavior: The Case of Military Reenlistment," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 499-523, July.
- Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
When requesting a correction, please mention this item's handle: RePEc:eee:labeco:v:6:y:1999:i:2:p:203-227. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.