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Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences

In: Research Findings in the Economics of Aging

Author

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  • Arie Kapteyn
  • James P. Smith
  • Arthur van Soest
  • James Banks

Abstract

Many western industrialized countries face strong budgetary pressures due to the aging of the baby boom generations and the general trends toward earlier ages of retirement. We use the American PSID and the European Community Household Panel (ECHP) to explain differences in prevalence and dynamics of self-reported work disability and labor force status. To that end we specify a two-equation dynamic panel data model describing the dynamics of labor force status and self-reported work disability. When we apply the U.S. parameters to the equations for the thirteen European countries we consider, the result is generally that work disability is lower and employment is higher. Furthermore, measures of employment protection across the different countries suggest that increased employment protection reduces reentry into the labor force and hence is a major factor explaining employment differences in the pre-retirement years.
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Suggested Citation

  • Arie Kapteyn & James P. Smith & Arthur van Soest & James Banks, 2010. "Labor Market Status and Transitions during the Pre-Retirement Years: Learning from International Differences," NBER Chapters, in: Research Findings in the Economics of Aging, pages 63-92, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:8192
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    References listed on IDEAS

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    2. David C. Stapleton & Richard V. Burkhauser (ed.), 2003. "The Decline in Employment of People with Disabilities: A Policy Puzzle," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number depd.
    3. James Banks & Arie Kapteyn & James P. Smith & Arthur Van Soest, 2004. "International Comparisons of Work Disability," Working Papers WR-155, RAND Corporation.
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    5. James Banks & Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability is a Pain in the ****, Especially in England, the Netherlands, and the United States," NBER Chapters, in: Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly, pages 251-293, National Bureau of Economic Research, Inc.
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    8. Börsch-Supan, Axel, 2007. "Work disability, health, and incentive effects," Papers 07-23, Sonderforschungsbreich 504.
    9. James Banks & Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability is a Pain in the ****, Especially in England, the Netherlands, and the United States," NBER Chapters,in: Health at Older Ages: The Causes and Consequences of Declining Disability among the Elderly, pages 251-293 National Bureau of Economic Research, Inc.
    10. Börsch-Supan, Axel, 2007. "Work Disability, Health, and Incentive Effects," Sonderforschungsbereich 504 Publications 07-23, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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    Cited by:

    1. Dimitris Christelis & Dimitris Georgarakos & Michael Haliassos, 2013. "Differences in Portfolios across Countries: Economic Environment versus Household Characteristics," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 220-236, March.
    2. Arie Kapteyn & James P. Smith & Arthur van Soest, 2009. "Work Disability, Work, and Justification Bias in Europe and the U.S," NBER Working Papers 15245, National Bureau of Economic Research, Inc.
    3. Arie Kapteyn, 2010. "What can we learn from (and about) global aging?," Demography, Springer;Population Association of America (PAA), pages 191-209.

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    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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