Training and Retirement

Nicolai Kristensen

No 6301, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years. Human capital theory predicts that the amount of training and the length of working life will be positively correlated in order to recoup investment and yield a higher return. Significant upper bound effects of training in prolonging working life are found for certain types of training and certain groups of workers. However, out-of-sample simulations indicate that on average one year of training only adds up to one month to the career length. This means that training in itself is not enough to substantially prolong careers and increase the workforce.

Keywords: training; retirement; option value; upper bound identification (search for similar items in EconPapers)
JEL-codes: H55 I21 J26 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2012-01
New Economics Papers: this item is included in nep-age, nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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