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The puzzle of older workers' employment: Distance to retirement and health effects

Bérangère Legendre and Mareva Sabatier ()
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Bérangère Legendre: IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc

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Abstract: This article investigates the extent to which the distance to retirement affects low employment rates among European older workers, taking into account a key but often neglected determinant: health status. To begin, the study amends McCall's job search model, in which the job search behavior is treated as age dependent. Agents are heterogeneous according to two attributes: distance to retirement and health. This model leads to clear predictions, such that the closer the retirement, the greater the reservation wage and the lower people's search effort. Older workers also exhibit lower exit rates from unemployment , an effect that gets enhanced by health problems. This empirical work, based on a French survey, confirms the existence of a distance effect but also puts the greater impact of health status into perspective. The distance effect explains only part of the puzzle of older workers' employment.

Keywords: distance to retirement; older workers' employment; health (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dge, nep-eur and nep-hea
Date: 2017
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Published in International Journal of Manpower, Emerald, 2017, 38 (1), pp.45-61. . <10.1108/IJM-02-2016-0042>

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DOI: 10.1108/IJM-02-2016-0042

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