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The Impact of Wealth on Job Exit Rates of Elderly Workers

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  • Bloemen, Hans

    () (Vrije Universiteit Amsterdam)

Abstract

In the literature theoretical models have appeared that predict a positive impact of the level of individual wealth on the job exit probability. Empirically this prediction is most likely to be relevant for elderly workers who have been able to accumulate wealth throughout their working life and whose residual working life is relatively short. In the Netherlands, as in other European countries, there is a tendency of introducing more individual choice options in pension schemes. It is likely that the individual level of wealth will become an increasingly important factor in the retirement decision. Therefore it is interesting to know whether individuals with a different financial situation make different job exit decisions, given other factors. Empirical analysis of job exit behaviour of elderly workers so far has concentrated on properties of the pension system and the health situation. For a sample of elderly male workers in the Netherlands in the period 1995 through 2001, we analyse the impact of wealth, savings, and debt position on job exit rates. We find evidence for a positive effect of wealth on the probability to retire (early).

Suggested Citation

  • Bloemen, Hans, 2006. "The Impact of Wealth on Job Exit Rates of Elderly Workers," IZA Discussion Papers 2247, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2247
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    References listed on IDEAS

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    1. Blundell, Richard & Magnac, Thierry & Meghir, Costas, 1997. "Savings and Labor-Market Transitions," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 153-164, April.
    2. Bloemen, Hans G & Stancanelli, Elena G F, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 400-439, April.
    3. Venti, Steven F. & Wise, David A., 1991. "Aging and the income value of housing wealth," Journal of Public Economics, Elsevier, pages 371-397.
    4. repec:spo:wpecon:info:hdl:2441/9704 is not listed on IDEAS
    5. Hamermesh, Daniel S, 1984. "Consumption during Retirement: The Missing Link in the Life Cycle," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 1-7, February.
    6. Hans G. Bloemen, 2002. "The relation between wealth and labour market transitions: an empirical study for the Netherlands," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(3), pages 249-268.
    7. Gustman, Alan L & Steinmeier, Thomas L, 2000. "Retirement in Dual-Career Families: A Structural Model," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 503-545, July.
    8. Stancanelli, Elena G F, 1999. " Do the Rich Stay Unemployed Longer? An Empirical Study for the UK," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 295-314, August.
    9. Maarten Lindeboom, 1998. "Microeconometric Analysis of the Retirement Decision: The Netherlands," OECD Economics Department Working Papers 207, OECD Publishing.
    10. Alessie, Rob & Lusardi, Annamaria & Kapteyn, Arie, 1999. "Saving after retirement: evidence from three different surveys," Labour Economics, Elsevier, vol. 6(2), pages 277-310, June.
    11. Kapteyn, Arie & de Vos, Klaas, 1998. "Social Security and Labor-Force Participation in the Netherlands," American Economic Review, American Economic Association, vol. 88(2), pages 164-167, May.
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    Cited by:

    1. Shu, Lei, 2017. "Essays on retirement income provision," Other publications TiSEM e5dd8c4e-03bf-4ec9-9651-b, Tilburg University, School of Economics and Management.
    2. Jan Rouwendal, 2009. "Housing Wealth and Household Portfolios in an Ageing Society," De Economist, Springer, vol. 157(1), pages 1-48, March.
    3. Hans G. Bloemen, 2016. "Private wealth and job exit at older age: a random effects model," Empirical Economics, Springer, vol. 51(2), pages 763-807, September.
    4. Marjan, MAES, 2008. "Does the dismantlement of early retirement schemes increase unemployment in Belgium ?," Discussion Papers (ECON - Département des Sciences Economiques) 2008041, Université catholique de Louvain, Département des Sciences Economiques.
    5. Allard Bruinshoofd & Sybille Grob, 2006. "Do changes in pension incentives affect retirement? A stated preferences approach to Dutch retirement consideration," DNB Working Papers 115, Netherlands Central Bank, Research Department.

    More about this item

    Keywords

    life cycle models; retirement; saving;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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