Discussion Paper

Behavior of male workers at the end of the life-cycle: an empirical analysis of states and controls

Abstract: This paper estimates the expectations of older male workers in the form of a 130 million element Markov transition probability matrix specifying the joint stochastic process for workers income, health, martial and employment status, conditioned on workers decisions about labor force participation and collection of Social Security benefits. The estimated transition matrix will be used in subsequent work to estimate the unknown parameters of workers utility functions under the assumption that their behavior is governed by the solution to a dynamic programming model. The paper also discusses some of the problems involved in constructing good measures of workers states and decisions.

Keywords: Labor supply; Retirement;

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Discussion Paper / Institute for Empirical Macroeconomics

Publication Date: 1989

Number: 6