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Working life and human capital investment

Niklas Gohl, Peter Haan, Elisabeth Kurz and Felix Weinhardt ()

CEP Discussion Papers from Centre for Economic Performance, LSE

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)
Date: 2021-03-19
New Economics Papers: this item is included in nep-age, nep-eur, nep-hrm and nep-lma
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