Distance to Retirement and The Job Search of Older Workers: The Case For Delaying Retirement Age

Jean-Olivier Hairault, Francois Langot and Thepthida Sopraseuth

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Abstract: This paper presents a theoretical foundation and empirical evidence in favor of the view that the retirement age decision impacts on the employment of older workers before this age. Countries with a retirement age at 60 are indeed characterized by lower employment rates for workers aged 55-59. Based on the French Labor Force Survey, we show that the likelihood of employment is significantly affected by the distance from retirement, in addition to age and other relevant variables. We then extend McCall's (1970) job search model by explicitly integrating life-cycle features and the retirement decision. Using simulations, we show that the distance effect in conjunction with the generosity of unemployment benefits for older workers explains the low rate of employment just before the eligibility retirement age. Finally, we show that implementing actuarially-fair schemes, not only extends the retirement age, but also encourages a more intensive job-search by older unemployed workers.

Keywords: Job Search; Older Workers; Retirement (search for similar items in EconPapers)
Date: 2010-09-01
Note: View the original document on HAL open archive server: https://hal.science/hal-00517107v1
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Citations: View citations in EconPapers (68)

Published in Journal of the European Economic Association, 2010, 8 (5), pp.1034-1076. ⟨10.1162/jeea_a_00014⟩

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Working Paper: Distance to Retirement and The Job Search of Older Workers: The Case For Delaying Retirement Age (2010)
Working Paper: Distance to Retirement and The Job Search of Older Workers: The Case For Delaying Retirement Age (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00517107

DOI: 10.1162/jeea_a_00014

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