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Title: The Effect of Social Security, Health, Demography and Technology on Retirement

Citation Type: Conference Paper

Publication Year: 2011

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Abstract: This article investigates the causes in the reduction of labor force participation ofthe old. We argue that the changes in social security policy and in technology, and theintroduction of Medicare may account for most of the changes in retirement over thesecond part of the last century in the U.S. economy. We develop a dynamic generalequilibrium model with endogenous retirement that embeds social security legislationand Medicare. The model is able to match very closely the increase in the retirementrate of American males and also to reproduce many stylized facts, such as retirementrate by age, by health status and income. We ?nd that changes in social securitypolicy - that became much more generous - account for a sizeable part of the expansionaggregate retirement rate (45% of the observed increase). They also explain, togetherwith Medicare, most of the variation of the retirement pro?le by age. We found thatwealth shocks can in?uence retirement behavior, so that the strong run-up in stockmarket in the nineties may have aected the decision of older workers to leave thelabor force.

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Authors: Rodrigues dos Santos, Marcelo; Cavalcanti Ferreira, Pedro

Conference Name: European Economic Association & Econometric Society

Publisher Location: Oslo, Norway

Data Collections: IPUMS USA

Topics: Aging and Retirement, Health, Other

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