Training and Retirement

40 Pages Posted: 4 Feb 2012

Abstract

This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years. Human capital theory predicts that the amount of training and the length of working life will be positively correlated in order to recoup investment and yield a higher return. Significant upper bound effects of training in prolonging working life are found for certain types of training and certain groups of workers. However, out-of-sample simulations indicate that on average one year of training only adds up to one month to the career length. This means that training in itself is not enough to substantially prolong careers and increase the workforce.

Keywords: training, retirement, option value, upper bound identification

JEL Classification: H55, I21, J26

Suggested Citation

Kristensen, Nicolai, Training and Retirement. IZA Discussion Paper No. 6301. Available at SSRN: https://ssrn.com/abstract=1999329

Nicolai Kristensen (Contact Author)

Aarhus School of Business ( email )

Haslegaardsvej 10
DK-8210 Aarhus, 8210
Denmark

Register to save articles to
your library

Register

Paper statistics

Downloads
51
rank
377,748
Abstract Views
603
PlumX Metrics