Measuring years of inactivity, years in retirement, time to retirement, and age at retirement within the Markov model

Abstract

Retirement-related concepts are treated as random variables within Markov process models that capture multiple labor force entries and exits. The expected number of years spent outside of the labor force, expected years in retirement, and expected age at retirement are computed-all of which are of immense policy interest but have been heretofore reported with less precisely measured proxies. Expected age at retirement varies directly with a person s age; but even younger people can expect to retire at ages substantially older than those commonly associated with retirement, such as age 60, 62, or 65. Between 1970 and 2003, men allocated most of their increase in life expectancy to increased time in retirement, but women allocated most of their increased life expectancy to labor force activity. Although people can exit and reenter the labor force at older ages, most 65-year-old men who are active in the labor force will not reenter after they eventually exit. At age 65, the probability that those who are inactive will reenter the labor force at some future time is .38for men and .27 for women. Life expectancy at exact ages is decomposed into the sum of the expected time spent active and inactive in the labor force, and also as the sum of the expected time to labor force separation and time in retirement.

Mortality and Morbidity Risks and Economic Behavior

“…34 However, considering that a person with HD typically becomes disabled around age 40, we can calculate the years of income lost because of HD. Worklife expectancy (i.e., expected number of years in the labor force) for 40 year old active men is 21.25 years (Skoog and Ciecka 2010). Dividing the effect we find by 21.25, we find that a gain of a year of income will cause years of schooling for men to increase by 11.5%, an effect that is almost identical to that found by Jayachandran and Lleras-Muney.…”

The Length of Working Life in Spain: Levels, Recent Trends, and the Impact of the Financial Crisis

“…Most of the existing studies on length of working life have focused on the USA (e.g., Dudel and Myrskylä 2016; Skoog and Ciecka 2010; Millimet et al. 2010), although studies on WLE have also been conducted for Finland (Leinonen et al.…”

“…Most estimates for the USA have been higher. For example, Dudel and Myrskylä (2016) estimated that in 2008–2011 in the USA, WLE at age 50 was 12.7 years for males and 11.0 years for females, with strong educational gradients (see also Skoog and Ciecka 2010; Millimet et al. 2003).…”

Working and disability expectancies at old ages: the role of childhood circumstances and education

“…Along with this measure, we estimate the number of years not in employment (including inactivity, unemployment, and retirement) and the number of years of disability (inactivity/unemployment with health problems up to age 70). WLE varies considerably by gender, education, and race/ethnicity (Dudel and Myrskylä 2017;Skoog and Ciecka 2010;Warner, Hayward, and Hardy 2010;Hayward and Lichter 1998;Hayward and Grady 1990). For instance, Dudel and Myrskylä, (2017) show that in the United States, in the period 2008-2011, the number of years in employment at age 50 was greater for males than for females.…”

“…While recent research has started to document the length of working life (Dudel and Myrskylä 2017;Hayward and Grady 1990;Skoog and Ciecka 2010;Warner et al 2010), the discussion, however, has not so far focused on the life-course predictors of working life expectancies. Most of these existing studies that examine health or labor force participation as functions of childhood disadvantages consider them as distinct processes.…”