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A Structural Retirement Model

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  • Alan L. Gustman
  • Thomas L. Steinmeier

Abstract

The model analyzed here constrains most work on the main job to be full time. Partial retirement requires a job change and a wage reduction.Estimates of utility function parameters and their distributions incorporate information on age of leaving the main job and of full retirement. These estimates determine the slope at different ages and the convexity of within period indifference curves between compensation and leisure. Even though age specific dummy variables are not used, the model closely tracks retirement behavior. Policy analysis based on earlier models with simpler structures is shown to be misleading.

Suggested Citation

  • Alan L. Gustman & Thomas L. Steinmeier, 1983. "A Structural Retirement Model," NBER Working Papers 1237, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1237
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    References listed on IDEAS

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    1. Alan S. Blinder, 1982. "Private Pensions and Public Pensions: Theory and Fact," NBER Working Papers 0902, National Bureau of Economic Research, Inc.
    2. Zabalza, A. & Pissarides, C. & Barton, M., 1980. "Social security and the choice between full-time work, part-time work and retirement," Journal of Public Economics, Elsevier, vol. 14(2), pages 245-276, October.
    3. Alan L. Gustman & Thomas L. Steinmeier, 1982. "Partial Retirement and Wage Profiles of Older Workers," NBER Working Papers 1000, National Bureau of Economic Research, Inc.
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