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The puzzle of older workers' employment: Distance to retirement and health effects

Author

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  • Bérangère Legendre

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

  • Mareva Sabatier

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

Abstract

This article investigates the extent to which the distance to retirement affects low employment rates among European older workers, taking into account a key but often neglected determinant: health status. To begin, the study amends McCall's job search model, in which the job search behavior is treated as age dependent. Agents are heterogeneous according to two attributes: distance to retirement and health. This model leads to clear predictions, such that the closer the retirement, the greater the reservation wage and the lower people's search effort. Older workers also exhibit lower exit rates from unemployment , an effect that gets enhanced by health problems. This empirical work, based on a French survey, confirms the existence of a distance effect but also puts the greater impact of health status into perspective. The distance effect explains only part of the puzzle of older workers' employment.

Suggested Citation

  • Bérangère Legendre & Mareva Sabatier, 2017. "The puzzle of older workers' employment: Distance to retirement and health effects," Post-Print hal-01522749, HAL.
  • Handle: RePEc:hal:journl:hal-01522749
    DOI: 10.1108/IJM-02-2016-0042
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01522749
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    Cited by:

    1. Kadija Charni, 2016. "The French Pension Reforms and their Impact on Unemployed Older Workers," AMSE Working Papers 1602, Aix-Marseille School of Economics, France, revised Jan 2016.
    2. Vigtel, Trond Christian, 2018. "The retirement age and the hiring of senior workers," Labour Economics, Elsevier, vol. 51(C), pages 247-270.
    3. Khaled Lahlouh & Delphine Lacaze & Richard Huaman-Ramirez, 2019. "Bridge employment and full retirement intentions: the role of Person-Environment fit," Working Papers hal-02162734, HAL.

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    More about this item

    Keywords

    distance to retirement; older workers' employment; health;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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