Essays on Retirement Economics

TitleEssays on Retirement Economics
Publication TypeThesis
Year of Publication2006
AuthorsEberhardt, B
Date Published2006
UniversityThe University of Wisconsin - Milwaukee
CityUnited States -- Wisconsin
KeywordsEmployment and Labor Force, Expectations, Health Conditions and Status, Healthcare

In the last thirty years, research on the economics of retirement has become increasingly important. Understanding the determinants of the retirement decision is a prerequisite to assessing the impact of public insurance programs or private pension schemes on labor force participation. Given the current uncertainties about Social Security's and Medicare's long-run financial sustainability, increasing labor force participation of the elderly would be a potential way to mitigate these uncertainties. The first chapter of this dissertation reviews the literature on the retirement decision for the last 30 years and summarizes the conclusions reached in this field so far. In the second chapter, the impact of self-rated survival probabilities on the decision to retire is investigated. It is shown that a simple life-cycle model without uncertainty predicts that higher life expectancies should also lead to later retirement. Using data from the Health and Retirement Study, it is found that individual beliefs about the chance of surviving until age 85 can explain part of the variation in retirement ages. Those respondents with below-average beliefs about life expectancies also retire earlier than other respondents, even when controlling for the current health status. The third essay studies the determinants of retiree well-being over time. Previous research has almost exclusively focussed on the economic well-being of retirees. However, non-economic variables may play an important role for the subjective well-being as well. Given that many public policies are aimed at increasing the well-being of individuals, it is important to understand the relative importance of economic and non-economic variables to predict how individual's well-being would respond to such policies. Previous research has mostly relied on cross-sectional data for this analysis, and hence, the contribution of this paper is to increase our understanding in this area by adding a time dimension and study how the well-being of retirees changes over time. The findings confirm the importance of the voluntariness of retirement, as found in earlier studies, and it is also found that on average retiree well-being increases with the length of retirement.

Endnote Keywords

Well Being

Endnote ID


Short TitleEssays on Retirement Economics
Citation Key6282