A dynamic programming approach to model the retirement behaviour of blue‐collar workers in Sweden

Karlström, Anders; Palme, Mårten; Svensson, Ingemar

doi:10.1002/jae.798

Cited by 32 publications

(29 citation statements)

References 7 publications

(11 reference statements)

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“…This paper is in line with the literature that uses structural research approaches to model retirement behavior (e.g. Rust, 1989;Stock and Wise, 1990;Rust and Phelan, 1997;Benitez-Silva, 2000;Heyma, 2004;Karlstrom et al, 2004;French, 2005;Blau, 2008;Van der Klaauw and Wolpin, 2008). Although some of these studies implement part-time labor, all of them model retirement as a binary decision.…”

Section: Introductionsupporting

confidence: 77%

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

Tolan

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in August 2017Abstract This paper develops a structural dynamic retirement model to investigate effects and corresponding underlying mechanisms of a partial retirement program on labor supply, fiscal balances, and the pension income distribution. The structural approach allows for disentangling the two counteracting mechanisms that drive the employment effects of partial retirement: 1) the crowding-out from full-time employment, and 2) the movement from early retirement or unemployment to partial retirement. It also allows for investigating the role of financial compensations in a partial retirement program. Based on a unique German administrative dataset, I perform counterfactual policy simulations that analyze the role of partial retirement combined with financial subsidies and an increased normal retirement age. The results show that partial retirement extends working lives but reduces the overall employment volume. The fiscal consequences of partial retirement are negative but substantially less so when wages and pensions in partial retirement remain uncompensated. Partial retirement decreases inequality in pension income and provides a way to smooth consumption especially for retirees in lower income deciles in the context of an increased normal retirement age.JEL: C61, J26, H55

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Section: Introductionsupporting

confidence: 77%

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

Tolan

2017

SSRN Journal

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“…Therefore, the agent's belief can be identi…ed using the factual object f x (x 0 jx; = k) under M2, which is essentially the selection on observables assumption that is widely employed in the policy evaluation literature 18 to identify the counterfactual objects of…”

Section: Parameters Of Interestmentioning

confidence: 99%

Semiparametric identification of structural dynamic optimal stopping time models

Chen¹

2007

Working Paper Series

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[Abstract]This paper presents new identi…cation results for the class of structural dynamic optimal stopping time models that are built upon the framework of the structural discrete Markov decision processes proposed by Rust (1994).We demonstrate how to semiparametrically identify the deep structural parameters of interest in the case where the utility function of an absorbing choice in the model is parametric but the distribution of unobserved heterogeneity is nonparametric. Our identi…cation strategy depends on availability of a continuous observed state variable that satis…es certain exclusion restrictions. If such excluded variable is accessible, we show that the dynamic optimal stopping model is semiparametrically identi…ed using control function approaches.

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“…Labour force participation and employment rates among 55-64 year olds are higher in Sweden than the OECD average. See also Hallberg (2004, 2006) and Karlström et al (2004).…”

Section: Introductionmentioning

confidence: 99%

Can adult education delay retirement from the labour market?

2010

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A dynamic programming approach to model the retirement behaviour of blue‐collar workers in Sweden

Cited by 32 publications

References 7 publications

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

The Effect of Partial Retirement on Labor Supply, Public Balances and the Income Distribution: Evidence from a Structural Analysis

Semiparametric identification of structural dynamic optimal stopping time models

Can adult education delay retirement from the labour market?

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