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Title: Test of Lazear's Mandatory Retirement Model
Resulting in 1 citation.
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Stern, Steven Todd, Petra E. |
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Test of Lazear's Mandatory Retirement Model In: Worker Well-Being, Research in Labor Economics, Volume 19. S.W. Polachek, ed. New York, NY: JAI Press, 2000: pp. 253-273 Cohort(s): Older Men Publisher: JAI Press, Inc. Keyword(s): Modeling, Mixed Effects; Retirement/Retirement Planning Discusses several testable implications of Lazear's (1979) model of mandatory retirement and assesses whether they are consistent with data from a national survey. Two hypotheses are tested, using data from the National Longitudinal Survey of Mature Men (NLS): mandatory retirement programs should include pension programs as part of the plan and they should be efficient; and workers subject to mandatory retirement should be no more likely to retire early than workers not subject to mandatory retirement. The NLS data set contains observations on 5,020 men aged 45-59 in 1966, who were followed from 1966 until 1983 with interviews conducted approximately every other year. Empirical evidence on the first hypothesis indicates a high positive correlation between the existence of pension plans and mandatory retirement programs, possibly lending support to this prediction of Lazear's model. However, data limitations precluded determining whether existing pension programs were efficient. In examining the second hypothesis, an econometric model for retirement behavior was estimated and used to contrast results for workers who were and were not subject to mandatory retirement programs. Results indicate that workers subject to mandatory retirement are more likely to retire early than those who are not, even at ages well before the mandatory retirement age. This evidence rejects an important prediction of Lazear's model and suggests that it does not capture the whole story in explaining the mandatory retirement phenomenon. (AR) (AgeLine Database, copyright 2002 AARP, all rights reserved) |
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Bibliography Citation
Stern, Steven and Petra E. Todd. "Test of Lazear's Mandatory Retirement Model" In: Worker Well-Being, Research in Labor Economics, Volume 19. S.W. Polachek, ed. New York, NY: JAI Press, 2000: pp. 253-273
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