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Work and Play Pave the Way: The Importance of Part Time Work in a Lifecycle Model

Author

Listed:
  • Ricky Kanabar
  • Peter Simmons

Abstract

US males labour force behaviour shows lifecycle effects. We develop a lifecycle model of individual labour supply, with a single financial asset and non labour income. With widely used preferences, we derive the analytical form of the value function and optimal labour participation for any period, t. Consumption and savings switches its form as participation changes. A spell of part time work has strong implications for earlier decisions on participation, consumption, savings and the marginal value of leisure and wealth. We apply our framework to explain the increasing prevalence of non standard retirement noted in the literature.

Suggested Citation

  • Ricky Kanabar & Peter Simmons, 2013. "Work and Play Pave the Way: The Importance of Part Time Work in a Lifecycle Model," Discussion Papers 13/01, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:13/01
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    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/2013/1301.pdf
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    References listed on IDEAS

    as
    1. Richard Blundell & Pierre-Andre Chiappori & Thierry Magnac & Costas Meghir, 2007. "Collective Labour Supply: Heterogeneity and Non-Participation," Review of Economic Studies, Oxford University Press, vol. 74(2), pages 417-445.
    2. Nicole Maestas, 2010. "Expectations and Realizations of Work after Retirement," Journal of Human Resources, University of Wisconsin Press, vol. 45(3).
    3. Olivier Donni & Nicolas Moreau, 2007. "Collective Labor Supply: A Single-Equation Model and Some Evidence from French Data," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
    4. Merton, Robert C., 1971. "Optimum consumption and portfolio rules in a continuous-time model," Journal of Economic Theory, Elsevier, vol. 3(4), pages 373-413, December.
    5. Ricky Kanabar, 2012. "Unretirement in England: An empirical perspective," Discussion Papers 12/31, Department of Economics, University of York.
    6. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Lifecycle; Labour supply decision; Retirement; Unretirement;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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