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Firms and Early Retirement: Offers That One Does Not Refuse

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  • Bellmann, Lutz

    (Institute for Employment Research (IAB), Nuremberg)

  • Janik, Florian

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

According to the Hutchens (1999) model, early retirement is not explained as a result of maximizing expected individual utility but rather as a demand-side phenomenon arising from a firm’s profit-maximizing behaviour. Firms enter into contracts with their employees that include clauses about early retirement. In response to demand or technological shocks, workers receive retirement offers from their employers which cannot be rejected by rational actors. Using the IAB Establishment Panel 2003-2006, the relationship between indicators of demand and technological shocks and the incidence and amount of early retirement is analysed. The results provide general support to the Hutchens model.

Suggested Citation

  • Bellmann, Lutz & Janik, Florian, 2007. "Firms and Early Retirement: Offers That One Does Not Refuse," IZA Discussion Papers 2931, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2931
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    References listed on IDEAS

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    Cited by:

    1. Monika Riedel & Helmut Hofer, 2013. "Determinants of the Transition from Work into Retirement," NRN working papers 2013-10, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
    2. Sascha Breij & Martijn Huisman & Dorly J. H. Deeg, 2020. "Educational differences in macro-level determinants of early exit from paid work: a multilevel analysis of 14 European countries," European Journal of Ageing, Springer, vol. 17(2), pages 217-227, June.

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    More about this item

    Keywords

    (involuntary) early retirement; labour demand; panel data;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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