Working life and human capital investment

Niklas Gohl, Peter Haan, Elisabeth Kurz and Felix Julian Weinhardt

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper provides a novel test of a key prediction of human capital theory that educational investment decisions depend on the length of the pay-off period. We obtain causal estimates by leveraging a unique reform of the German public pension system that, across a sharp date-of-birth cutoff, increased the early retirement age by three years. Using RDD, DiD, and IV estimation strategies on census and household-panel data, we show that this reform causally increased educational investment in the form of on-the-job training. In contrast, non-job related training before retirement was not affected. We explore heterogeneity and additional outcomes.

Keywords: human capital; retirement policies; RDD (search for similar items in EconPapers)
JEL-codes: H21 J24 J26 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2021-03-19
New Economics Papers: this item is included in nep-age, nep-cfn, nep-eur and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:114422

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