Nonconvexities, Retirement, and the Elasticity of Labor Supply

We consider two life cycle models of labor supply that use nonconvexities to generate retirement. In each case we derive a link between hours worked prior to retirement, the intertemporal elasticity of substitution for labor (IES), and the size of the nonconvexities. This link is robust to allowing for credit constraints and human capital accumulation by younger workers and suggests values for the IES that are .75 or higher.

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Year of publication:	2013
Authors:	Rogerson, Richard ; Wallenius, Johanna
Published in:	American Economic Review. - American Economic Association - AEA. - Vol. 103.2013, 4, p. 1445-62
Publisher:	American Economic Association - AEA

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Extent:	application/pdf application/zip
Type of publication:	Article
Notes:	DOI: 10.1257/aer.103.4.1445
Classification:	D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; J22 - Time Allocation and Labor Supply ; J24 - Human Capital; Skills; Occupational Choice; Labor Productivity ; J26 - Retirement; Retirement Policies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010666613