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A Test Of Lazear’S Mandatory Retirement Model

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Listed author(s):
  • Steven Stern

    ()

  • Petra Todd

    ()

Abstract

This chapter discusses several testable implications of Lazear’s (1979) model of mandatory retirement and tests whether they are consistent with the data, using a sample from the National Longitudinal Survey of Mature Men. Empirical evidence on the close association between firm pension programs and mandatory retirement programs can be interpreted to lend support to Lazear’s model. However, estimates from an econometric model of retirement behavior reject an important implication of the model concerning the relationship between mandatory retirement and the propensity to retire early.

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File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap391.pdf
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Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 391.

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Length: 22 pages
Date of creation: Dec 2000
Handle: RePEc:vir:virpap:391
Contact details of provider: Web page: http://www.virginia.edu/economics/home.html

Keywords: mandatory retirement; survival analysis;

Find related papers by JEL classification:

  • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
  • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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  1. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
  2. Butler, J S & Anderson, Kathryn H & Burkhauser, Richard V, 1989. "Work and Health after Retirement: A Competing Risks Model with Semiparametric Unobserved Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 46-53, February.
  3. James L. Medoff & Katharine G. Abraham, 1981. "Are Those Paid More Really More Productive? The Case of Experience," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 186-216.
  4. Edward P. Lazear, 1983. "Pensions as Severance Pay," NBER Chapters,in: Financial Aspects of the United States Pension System, pages 57-90 National Bureau of Economic Research, Inc.
  5. Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
  6. Laurence J. Kotlikoff & Daniel E. Smith, 1983. "Introduction to "Pensions in the American Economy"," NBER Chapters,in: Pensions in the American Economy, pages 1-19 National Bureau of Economic Research, Inc.
  7. Alan L. Gustman & Thomas L. Steinmeier, 1984. "Partial Retirement and the Analysis of Retirement Behavior," ILR Review, Cornell University, ILR School, vol. 37(3), pages 403-415, April.
  8. Kotlikoff, Laurence J. & Smith, Daniel E., 1984. "Pensions in the American Economy," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226451466, March.
  9. James Banks & Sarah Smith, 2006. "Retirement in the UK," Oxford Review of Economic Policy, Oxford University Press, vol. 22(1), pages 40-56, Spring.
  10. Ham, John C & Rea, Samuel A, Jr, 1987. "Unemployment Insurance and Male Unemployment Duration in Canada," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 325-353, July.
  11. Gunderson, Morley & Melino, Angelo, 1990. "The Effects of Public Policy on Strike Duration," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 295-316, July.
  12. Stern, Steven, 1987. "Promotion and Optimal Retirement," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 107-123, October.
  13. Heckman, James J & Walker, James R, 1990. "The Relationship between Wages and Income and the Timing and Spacing of Births: Evidence from Swedish Longitudinal Data," Econometrica, Econometric Society, vol. 58(6), pages 1411-1441, November.
  14. Shulamit B. Kahn & Kevin Lang, 1995. "The Causes of Hours Constraints: Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 914-928, November.
  15. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
  16. Hutchens, Robert M, 1987. "A Test of Lazear's Theory of Delayed Payment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 153-170, October.
  17. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51.
  18. Richard V. Burkhauser & Joseph F. Quinn, 1983. "Is Mandatory Retirement Overrated? Evidence from the 1970s," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 337-358.
  19. Shulamit Kahn & Kevin Lang, 1987. "Constraints on the Choice of Work Hours: Agency vs. Specific-Capital," NBER Working Papers 2238, National Bureau of Economic Research, Inc.
  20. Light, Audrey & Ureta, Manuelita, 1992. "Panel Estimates of Male and Female Job Turnover Behavior: Can Female Nonquitters Be Identified?," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 156-181, April.
  21. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
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Cited by:

  1. Alan L. Gustman & F. Thomas Juster, 1995. "Income and Wealth of Older American Households: Modeling Issues for Public Policy Analysis," NBER Working Papers 4996, National Bureau of Economic Research, Inc.
  2. Uschi Backes-Gellner & Stephan Veen, 2007. "Aging Workforces and Challenges to Human Resource Management in German Firms," Working Papers 0079, University of Zurich, Institute for Strategy and Business Economics (ISU).

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