|Title||Technical Progress and Early Retirement*|
|Publication Type||Journal Article|
|Year of Publication||2011|
|Authors||Ahituv, A, Zeira, J|
|Journal||The Economic JournalThe Economic Journal|
|Pagination||171 - 193|
|Keywords||Early retirement, erosion effect, Technology, wage effect|
This article examines the effect of sector technical change on early retirement and identifies two opposing effects. One is caused by the need to learn the new technologies. As older workers have shorter career horizons, they gain less from such learning and retire earlier. This is the erosion effect. The second effect is opposite. Since technologies are positively correlated across sectors and since aggregate technical change raises aggregate wages, sector technical change is negatively related to early retirement. This is the wage effect. Using individual and sector data, we separate the two effects and find empirical support for the theory.