Private Wealth and Job Exit at Older Age: A Random Effects Model

Hans Bloemen ()

No 3386, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Private wealth holdings are likely to become an increasingly important determinant in the job exit decision of elderly workers. Net wealth may correlate with worker’s characteristics that also determine the exit out of a job. It is therefore important to include a rich set of observed characteristics in an empirical model for retirement in order to measure the (marginal) effect of wealth on the job exit rate. But even with a rich set of regressors the question remains whether there are unobservable worker’s characteristics that affect both net wealth and the job exit rate. We specify a simultaneous equations model for job exit transitions with multiple destinations, net wealth, and the initial labour market state. The job exit rates and the net wealth equation contain random effects. We allow for correlation between the random effects of job exit and net wealth, and the initial labour market state.

Keywords: retirement; life cycle models; saving (search for similar items in EconPapers)
JEL-codes: D91 J26 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2008-03
New Economics Papers: this item is included in nep-age and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published - revised version published in: Empirical Economics, 2016, 51 (2), 763-807

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Related works:
Journal Article: Private wealth and job exit at older age: a random effects model (2016)
Working Paper: Private Wealth and Job Exit at Older Age: a Random Effects Model (2008)
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