"A new look at technical progress and early retirement"
Joint with Montserrat Vilalta-Bufí.
First version: December 2012.
Last version: June 2015.
(previously circulated as "Technical progress, sorting, and early retirement" and "Technical progress, retraining cost, and early retirement")
Technological progress affects early retirement in two opposing ways. On the one hand, it increases real wages and thus produces an incentive to postpone retirement. On the other hand, it erodes workers' skills, making early retirement more likely. Using the Health and Retirement Study surveys, we re-examine the effect of technical progress on early retirement. We measure technical progress during the whole working life of the individuals, and find that its effect on the probability of early retirement is non-monotonic. In particular, we find that when technical change is small the erosion effect dominates, but when it is large the wage effect dominates. These results may signal that the higher the technical progress the more willing are the elderly to retrain, which has direct policy implications for the design of elderly training programs.
Early retirement; Retraining; Technological change.
J24, J26, O33.
- IZA Journal of Labor Policy 5:5 (2016).
- IZA Newsroom, April 2016.
- Job market monitor, April 2016.
- PersonalPraxis24 (in German), April 2016.
Previous working paper versions:
- Temi di discussione (Working papers) 963, Bank of Italy (2014).
- Working Papers in Economics 294, Universitat de Barcelona (2013).
- IZA/RIETI Workshop: Changing Demographics and the Labor Market, May 2015.
- BGSE Winter Workshops, December 2013 (Montserrat Vilalta-Bufí).
- Seminar at University of Vigo, November 2013 (Montserrat Vilalta-Bufí).
- Seminar at University of Gröningen, November 2013 (Montserrat Vilalta-Bufí).
- XREAP 2013 Symposium, Barcelona, October 2013 (Montserrat Vilalta-Bufí).
- X Jornadas de Economía Laboral, Madrid, July 2013 (Montserrat Vilalta-Bufí).
- Seminar at the University of Barcelona, 2013 (Montserrat Vilalta-Bufí).
- IX EBES Conference, Rome, January 2013 (Montserrat Vilalta-Bufí).
- XXXVII Simposio de la Asociación Española de Economía, Vigo, December 2012.