In most data sets of labor force participation of the elderly, an empirical regularity that emerges is that retirement rates are particularly high at age 65. While there are numerous economic reasons why individuals may choose to retire at 65, empirical models that have attempted to explain the...

Proposed changes in the U.S. Social Security provisions include increasing the normal retirement age from 65 to 67 and changing from 3% to 8% the increase in benefits for each year that retirement is delayed after normal retirement. The paper considers the interaction between these changes and...

The ongoing analysis of the effects of pension plan provisions on retirement is pursued in this paper. A primary objective of this paper is to test the validity of models previously developed and estimated with data from a Fortune 500 company, here using data from a second large company. The...

Empirical analysis often raises questions of approximation to underlying individual behavior. Closer approximation may require more complex statistical specifications, On the other hand, more complex specifications may presume computational facility that is beyond the grasp of most real people...

Recently many U.S. firms have offered "window" plans that provide bonuses to a group of workers if the worker retires within a specified short time span. This paper examines a window plan at a Fortune 500 firm, and addresses two main issues. First, what was the effect of the window plan on...

This paper investigates the possibility, raised by Perron (1989, 1990a), that aggregate economic time series can be characterized as being stationary around broken trend lines. Unlike Perron, we treat the break date as unknown a priori. Asymptotic distributions are developed for recursive,...

The American population is aging rapidly. Persons 65 and over who now constitute about one-fifth of the population will constitute about two-fifths of the population by 2040. In addition, individuals are living longer. Yet the labor force participation of older Americans has fallen dramatically...

The paper develops a model of retirement based on the option value of continuing to work. Continuing to work maintains the option of retiring on more advantageous terms later. The model is used to estimate the effects on retirement of firm pension plan provisions. Typical defined benefit pension...

The option value model developed in an earlier paper is used to simulate the effect on retirement of changes in a firm's pension plan compared to the effect of changes in Social Security provisions. The provisions of the firm's pension plan have a much greater effect than Social Security...

Recent policy has focused on alleviating poverty among the elderly, with varying degrees of success. Gains to some subsets of the elderly population have come at the expense of others. A component of the policy debate has been identifying factors which might influence labor force participation...