A Structural Retirement Model

55 Pages Posted: 9 Mar 2004 Last revised: 20 Nov 2022

See all articles by Alan L. Gustman

Alan L. Gustman

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography

Date Written: November 1983

Abstract

The model analyzed here constrains most work on the main job to be full time. Partial retirement requires a job change and a wage reduction.Estimates of utility function parameters and their distributions incorporate information on age of leaving the main job and of full retirement. These estimates determine the slope at different ages and the convexity of within period indifference curves between compensation and leisure. Even though age specific dummy variables are not used, the model closely tracks retirement behavior. Policy analysis based on earlier models with simpler structures is shown to be misleading.

Suggested Citation

Gustman, Alan L. and Steinmeier, Thomas L., A Structural Retirement Model (November 1983). NBER Working Paper No. w1237, Available at SSRN: https://ssrn.com/abstract=321292

Alan L. Gustman (Contact Author)

Dartmouth College - Department of Economics ( email )

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Thomas L. Steinmeier

Texas Tech University - Department of Economics and Geography ( email )

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