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Labour market transitions and retirement of men in the UK

Author

Listed:
  • Costas Meghir

    (Institute for Fiscal Studies and Yale University)

  • Edward Whitehouse

    (Institute for Fiscal Studies)

Abstract

We study transitions in and out of work for men over the age of forty in order to investigate the principal determinants of retirement age. We apply non-parametric techniques to describe the exit to retirement. We then estimate a multiple spell model of transitions in and out of work allowing for correlated heterogeneity across different types of spells. We also present an LM test of unobserved heterogeneity for multiple spell models. Finally, we assess the importance of economic variables in determinining transitions and we find that increased earnings in work delay job exit while increased social security benefits delay the return to work. In conjunction, the two effects imply that economic incentives may be important determinants of the retirement age.

Suggested Citation

  • Costas Meghir & Edward Whitehouse, 1995. "Labour market transitions and retirement of men in the UK," IFS Working Papers W95/10, Institute for Fiscal Studies.
  • Handle: RePEc:ifs:ifsewp:95/10
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