Training Background and Early Retirement
Raymond Michel Montizaan
Maastricht University - Department of Accounting and Information Management
Andries De Grip
Maastricht School of Business and Economics; Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 3504
Several studies show that employees with firm-specific skills are more likely to be covered by employer-sponsored pension schemes than workers with general skills. Therefore it can be expected that workers with firm-specific skills retire earlier. This paper tests this prediction using US data from the National Longitudinal Survey of Older Men. We find that workers who participated in firm-specific training in their early careers retire earlier than workers with a general training background. This indicates that shared investments in firm-specific training are embedded in implicit contracts that induce early retirement. The results remain robust when controlling for technological change and work commitment.
Number of Pages in PDF File: 32
Keywords: retirement, training, deferred compensation
JEL Classification: J14, J26, J31working papers series
Date posted: June 9, 2008
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