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The Trend in Retirement

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Author Info
Karen A. Kopecky () (Economics University of Rochester)

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Abstract

A model with leisure production and endogenous retirement is used to explain the declining labor-force participation rates of elderly males. Using the Health and Retirement Study, the model is calibrated to cross-sectional data on the labor-force participation rates of elderly US males by age and their average drop in market consumption in the year 2000. Running the calibrated model for the period 1850 to 2000, a prediction of the evolution of the cross-section is obtained and compared with data. The model is able to predict both the increase in retirement since 1850 and the observed drop in market consumption at the moment of retirement. The increase in retirement is driven by rising real wages and a falling price of leisure goods over time

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Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 187.

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Date of creation: 03 Dec 2006
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Handle: RePEc:red:sed006:187

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Related research
Keywords: retirement leisure home production consumption-drop technological progress

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Find related papers by JEL classification:
E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure," Proceedings, Federal Reserve Bank of San Francisco. [Downloadable!]
  2. Guillaume Vandenbroucke, 2005. "A Model of the Trends in Hours," Economie d'Avant Garde Research Reports 11, Economie d'Avant Garde, revised Nov 2005. [Downloadable!]
    Other versions:
  3. Moshe Hazan, 2006. "Longevity and Lifetime Labor Input: Data and Implications," DEGIT Conference Papers c011_065, DEGIT, Dynamics, Economic Growth, and International Trade. [Downloadable!]
    Other versions:
  4. Elizabeth M. Caucutt & Thomas F. Cooley & Nezih Guner, 2007. "The Farm, the City, and the Emergence of Social Security," NBER Working Papers 12854, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. David M. Blau & Ryan Goodstein, 2007. "What Explains Trends in Labor Force Participation of Older Men in the United States?," IZA Discussion Papers 2991, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Jeremy Greenwood & Guillaume Vandenbroucke, 2005. "Hours Worked: Long-Run Trends," Economie d'Avant Garde Research Reports 10, Economie d'Avant Garde. [Downloadable!]
  7. Mark Aguiar & Erik Hurst, 2006. "Measuring trends in leisure: the allocation of time over five decades," Working Papers 06-2, Federal Reserve Bank of Boston. [Downloadable!]
    Other versions:
  8. Galindev, Ragchaasuren, 2008. "The evolution of population, technology and output," MPRA Paper 7281, University Library of Munich, Germany, revised 22 Jul 2008. [Downloadable!]
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