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Life-Cycle Models: Lifetime Earnings and the Timing of Retirement

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  • John Laitner

    (University of Michigan)

  • Dan Silverman

    (University of Michigan)

Abstract

After dropping for a century, the average retirement age for U.S. males seems to have leveled off in recent decades. An important question is whether as future improvements in technology cause wages to rise, desired retirement ages will resume their downward trend, or not. This paper attempts to use HRS panel data to test how relatively high (or low) earnings affect male retirement ages. Our goal is to use cross-sectional earning differences to help anticipate likely time-series developments in coming decades. Our preliminary regression results show that higher earnings do lead to somewhat earlier retirement. Unless additional analysis changes the parameter estimates, the implication is that the downward trend in male retirement ages will ultimately return.

Suggested Citation

  • John Laitner & Dan Silverman, 2007. "Life-Cycle Models: Lifetime Earnings and the Timing of Retirement," Working Papers wp165, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp165
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    References listed on IDEAS

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    3. John Laitner & Dan Silverman, 2005. "Estimating Life-Cycle Parameters from Consumption Behavior at Retirement," NBER Working Papers 11163, National Bureau of Economic Research, Inc.
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    12. Nicole Maestas, 2004. "Back to Work: Expectations and Realizations of Work After Retirement," Working Papers wp085, University of Michigan, Michigan Retirement Research Center.
    13. Michael D. Hurd & Susann Rohwedder, 2002. "The Retirement-Consumption Puzzle Anticipated and Actual Declines in Spending at Retirement," Working Papers DRU-3009, RAND Corporation.
    14. Daniel S. Hamermesh, 2005. "Why Not Retire? The Time and Timing Costs of Market Work," Working Papers wp104, University of Michigan, Michigan Retirement Research Center.
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