IDEAS home Printed from https://ideas.repec.org/p/uow/depec1/wp03-17.html
   My bibliography  Save this paper

A Unit Record Analysis of Older Male Labour Force Participation

Author

Abstract

This paper presents empirical analyses of econometric models of older males’ labour force participation based upon the orthodox theory of labour supply. The aim is to assess the effectiveness of using of micro data to account for older male labour force participation rate patterns over recent decades. As such, the influence of financial variables from the budget constraint and observable characteristics from the utility function are incorporated into reduced form models estimating the older male’s expected retirement age and the probability of an older male’s labour force participation using unit record data. The research findings presented emphasise the role of human capital and potential market wages for an older individual’s labour force participation. In contrast, the coefficients attached to observable characteristics variables, representing tastes and preferences for work and leisure, were rarely statistically significant or of a consistent sign across age groups or time periods, meaning that that unobservable tastes may dominate the labour force participation decision. A major finding was that higher wage earners were more likely to anticipate an earlier exit than lower earners. This shows that expectations do not necessarily match actual labour force participation behaviour, and that lower wage earners may be more vulnerable to unanticipated labour force exit. Finally, micro-based findings were not adequately translated to the macro level, being unable to directly offer inferences for aggregate changes in older male labour force participation rates over time. This problem of aggregation results in a fallacy of composition in reasoning, meaning that the micro models presented have only limited use for explaining older male labour force participation rate patterns over recent decades.

Suggested Citation

  • O'Brien, Martin, 2003. "A Unit Record Analysis of Older Male Labour Force Participation," Economics Working Papers wp03-17, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp03-17
    as

    Download full text from publisher

    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow012159.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Boskin, Michael J, 1977. "Social Security and Retirement Decisions," Economic Inquiry, Western Economic Association International, vol. 15(1), pages 1-25, January.
    2. Borland, J., 1995. "Male Labour Market Participation in Australia," Department of Economics - Working Papers Series 461, The University of Melbourne.
    3. Richard V. Burkhauser, 1980. "The Early Acceptance of Social Security: An Asset Maximization Approach," ILR Review, Cornell University, ILR School, vol. 33(4), pages 484-492, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. O'Brien, Martin, 2004. "Hidden Unemployment and Older Male Workers," Economics Working Papers wp04-02, School of Economics, University of Wollongong, NSW, Australia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Olivia S. Mitchell & Gary S. Fields, 1981. "The Effects of Pensions and Earnings on Retirement: A Review Essay," NBER Working Papers 0772, National Bureau of Economic Research, Inc.
    2. Catherine Cazals, 1994. "La retraite dans les modèles d'offre de travail : un survol de la littérature," Économie et Prévision, Programme National Persée, vol. 115(4), pages 43-62.
    3. repec:eee:labchp:v:1:y:1986:i:c:p:305-355 is not listed on IDEAS
    4. John Bound, 1989. "Self-Reported vs. Objective Measures of Health in Retirement Models," NBER Working Papers 2997, National Bureau of Economic Research, Inc.
    5. Karakaya, Güngör, 2008. "Early cessation of activity in the labour market: impact of supply and demand factors," MPRA Paper 13390, University Library of Munich, Germany.
    6. Laurence J. Kotlikoff & David A. Wise, 1988. "Pension Backloading, Wage Taxes, and Work Disincentives," NBER Chapters, in: Tax Policy and the Economy: Volume 2, pages 161-196, National Bureau of Economic Research, Inc.
    7. Tryggvi Thor Herbertsson, 2001. "Shrinking Labour Forces and Early Retirement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(4), pages 31-37, October.
    8. Richard A. Ippolito, 1983. "Public Policy Towards Private Pensions," Contemporary Economic Policy, Western Economic Association International, vol. 1(3), pages 53-76, April.
    9. Leora Friedberg, 2000. "The Labor Supply Effects of the Social Security Earnings Test," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 48-63, February.
    10. Krueger, Alan B & Pischke, Jorn-Steffen, 1992. "The Effect of Social Security on Labor Supply: A Cohort Analysis of the Notch Generation," Journal of Labor Economics, University of Chicago Press, vol. 10(4), pages 412-437, October.
    11. Gangaram Singh & Alex DeNoble, 2003. "Early Retirees As the Next Generation of Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 27(3), pages 207-226, July.
    12. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
    13. Herbertsson, Tryggvi Thor & Orszag, Mike, 2003. "The Early Retirement Burden: Assessing the Costs of the Continued Prevalence of Early Retirement in OECD Countries," IZA Discussion Papers 816, Institute of Labor Economics (IZA).
    14. Boskin, Michael J. & Hurd, Michael D., 1978. "The effect of social security on early retirement," Journal of Public Economics, Elsevier, vol. 10(3), pages 361-377, December.
    15. Frederic P. Slade, 1982. "Labor Force Entry and Exit of Older Men: A Longitudinal Study," NBER Working Papers 1029, National Bureau of Economic Research, Inc.
    16. J. Ignacio Conde-Ruiz & Vincenzo Galasso & Paola Profeta, "undated". "The Evolution of Retirement," Working Papers 2005-03, FEDEA.
    17. Michael D. Hurd, 1990. "The Joint Retirement Decision of Husbands and Wives," NBER Chapters, in: Issues in the Economics of Aging, pages 231-258, National Bureau of Economic Research, Inc.
    18. Morten I. Lau & Panu Poutvaara, 2006. "Social Security Incentives and Human Capital Investment," Finnish Economic Papers, Finnish Economic Association, vol. 19(1), pages 16-24, Spring.
    19. Philippe Michel & Pierre Pestieau, 2013. "Social Security And Early Retirement In An Overlapping-Generations Growth Model," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 723-737, November.
    20. Krueger, Alan B. & Meyer, Bruce D., 2002. "Labor supply effects of social insurance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 33, pages 2327-2392, Elsevier.
    21. Tetsuji Yamada & Tadashi Yamada, 1987. "Social Security and Earlier Retirement in Japan: Cross-Sectional Evidence," NBER Working Papers 2442, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uow:depec1:wp03-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Siminski (email available below). General contact details of provider: https://edirc.repec.org/data/deuowau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.